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Bangladesh underlines the need to cautiously spend foreign exchange reserves amid Sri Lanka’s economic crisis

Amid rising commodity prices, time to spend forex judiciously?

After the economic crisis in Sri Lanka, Bangladesh is taking no chances. Senior officials and authorities at a high level meeting held on Sunday to look at Bangladesh's macroeconomic situation suggested that Dhaka should spend its foreign currencies cautiously. Bangladesh’s import bill like many others has surged due to high global prices of commodities including fuel. The meeting chaired by Bangladesh’s finance minister AHM Mustafa Kamal also discussed the ongoing crisis in Sri Lanka.

The meeting held virtually was also attended by senior officials of the finance ministry and central bank among others.

Sources told the Financial Express Bangladesh that “with a pen-picture of the national economy and new budget outline on the table, the planners categorically discussed the necessity of carefulness in opening letters of credit (LC) so as to avoid unnecessary imports to save foreign-currency reserves as one of the potential thrift measures.”

Bangladesh’s subsidy bill is also likely to shoot up due to higher subsidies on electricity, gas and fertiliser. The government identifies this factor as a big challenge for the economy, the newspaper said.

Last week, Sri Lanka announced that it would default in repayment of external debt. Following the deepening of the economic crisis, Colombo Stock Exchange has decided to remain shut for five working days.  

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