Bangladesh's foreign exchange reserves, boosted by export growth and huge inflows of remittances, exceeded 4.09 billion U.S. dollars on Monday, The Daily Star reported Tuesday.

Remittances jumped by 29 percent in July 2006-January 2007 period compared to a year earlier to reach 3.32 billion dollars. The surge was the result of the increased use of official channels by Bangladeshis abroad to send their money home.

In recent years the country's private banks have made a massive drive to increase their share of the remittance market, creating more official channels. At the same time the government has moved to crack down on illegal money smuggling.

In the current fiscal year (July 2006-June 2007), the country received on average more than 400 million dollars a month in remittances, while in January of the current fiscal the figure reached 463 million dollars.

The strength of the export sector was another reason for the record foreign reserves.

Exports fetched 6.22 billion dollars, growing at around 15 percent, during the July-December period of the fiscal 2006-07, up from 4.94 billion dollars during the same period a year earlier. Export earnings averaged 1 billion dollars every month of the current fiscal. At the same time imports have declined.

According to Export Promotion Bureau (EPB), if political situation continues peacefully, exports would increase significantly in the current fiscal year.

The value of local currency taka against the U.S. dollar in the local money market is also seen as strong due to booming foreign reserve. The dollar price has been steady at 69 taka during the current month, compared with 69.7 taka in June 2006.

However, the central bank took some measures and bought dollar from the money market so that the price of greenback will not fall significantly.

The bank is concerned that if the dollar price drops significantly, exporters and remitters may be discouraged from bringing currency into the country.

Source: Xinhua