B Mirror Report: Bangladesh Bank (BB) Governor Dr. Ahsan H. Mansur on Tuesday voiced strong confidence about Bangladesh’s macroeconomic outlook, saying the country’s foreign exchange reserves are well positioned to reach  and even exceed  US$35 billion by the end of the current fiscal year 2025-26 (FY26).

Addressing a seminar titled “Systematic Efforts to Understand Economic Pulse: Importance of Purchasing Managers’ Index (PMI)” at the Metropolitan Chamber of Commerce and Industry (MCCI) office in the capital, the governor said achieving the $35 billion reserve level would place the economy in a highly comfortable position.

The seminar was jointly organised by MCCI and Policy Exchange Bangladesh (PEB).

Dr. Mansur clarified that the projected reserve target would be attainable without depending on funds from the International Monetary Fund (IMF), noting that any additional external financing would be a bonus rather than a prerequisite.

Highlighting notable improvements in the balance of payments and the external sector, the BB governor acknowledged that exports are still under pressure and remain a weak area. However, he pointed to positive global trends, particularly lower import prices, which have helped Bangladesh gain in terms of trade.

He said energy prices have dropped sharply, with average petroleum prices declining by around 30 percent, creating a direct benefit for the economy. As a result, although import payments increased by about 5 to 6 percent this year, the actual volume of imports grew much more substantially.

According to him, data from Chittagong port supports this trend, showing significant rises in both cargo tonnage and container traffic.

Dr. Mansur also discussed the severe liquidity stress the banking sector had experienced earlier, triggered mainly by a foreign exchange shortage. He revealed that the central bank was compelled to clear around $3.5 billion in accumulated arrears.

He explained that the sharp fall in foreign reserves from $48 billion to $20 billion had caused a major contraction in money supply, with trillions of taka flowing out of the economy. This situation led to sluggish deposit growth, which stood at just 6.4 percent in December 2024, limiting banks’ ability to finance the private sector.

However, recent figures show a recovery, with deposit growth rising to 11 percent. With total deposits now estimated at nearly Tk 20 trillion, this increase represents an additional Tk 2.2 trillion entering the financial system, he added.

Emphasising data-driven policymaking, the governor said authorities must rely on high-frequency indicators such as daily exchange rates, interbank interest rates and remittance inflows, as policymakers do not have the luxury of foresight.

On remittances, he shared encouraging updates, stating that daily inflows have recently crossed $170 million, while monthly receipts were already about 70 percent of the previous month’s total at the time of his remarks.

Dr. Mansur also welcomed the launch of the Purchasing Managers’ Index (PMI), praising MCCI and Policy Exchange for the initiative and describing the index as a valuable new tool that would strengthen evidence-based policymaking.

British High Commission to Bangladesh Deputy High Commissioner and Development Director James Goldman attended the programme as the special guest. MCCI President Kamran T. Rahman delivered the welcome address, while PEB Chairman and CEO Dr. M. Masrur Reaz presented the keynote paper. Issam Mosaddeq, Head of Prosperity and Economic Growth at the UK’s FCDO, provided the contextual overview of the PMI.