The International Monetary Fund (IMF) disbursed $476.27 million to Bangladesh as the first instalment of a $4.7 billion loan it approved earlier in the week. The disbursed amount has already been added to the country's foreign exchange reserves that stood at $32.69 billion, said Md Mezbaul Haque, spokesperson of Bangladesh Bank, but that includes $7 billion in encumbered reserves that the IMF objects to including in the reserve figure.

The development comes at a time when Bangladesh's forex market suffers from volatility owing to dollar shortage resulting from high import payments. The IMF said the government made the right decision to go to the IMF early, before any crisis hit. The Fund's country head Rahhul Anand said Bangladesh is not in crisis. Just like countries around the world, Bangladesh is dealing with the impact of global shocks - first from the pandemic and then from the ongoing war in Ukraine, he said.

Bangladesh Bank sold US dollars at Tk 101 each to banks for the first time this week, indicating it is likely to devalue the local currency to reflect the market reality. The central bank sold $89 million to banks on February 1 to enable the financial institutions to clear import bills on behalf of their clients. The latest depreciation comes nearly a month after the Bangladesh Bank sold the greenback to banks at Tk 100 early January this year to help settle import payments.

In the interbank market, the greenback was traded at Tk 107 each on Thursday (Feb. 2), reflecting a 24.4 percent loss in value of taka against the US dollar from Tk 86 a year ago. Taka has been under pressure against the dollar over the last one year owing to higher import payments than overall receipts from export and remittance. This forced the central bank to devalue its selling rate of the greenback several times in the last year.

Inward remittances rose to a five-month high in January as banks became desperate to mobilise US dollars from abroad to overcome the stress in the foreign exchange market. Expatriates sent home $1.95 billion last month, the highest since September when $1.53 billion flowed into the country, data from the Bangladesh Bank showed. January's receipts were nearly 15 percent higher than December's $1.69 billion and 14.9 percent from $1.70 billion recorded in the same month last year.

Bangladesh needs a higher supply of US dollars to tackle the instability in the foreign currency market. The Bangladesh Foreign Exchange Dealers Association, and the Association of Bankers Bangladesh, a platform for managing directors of banks, have recently decided to collect remittances from foreign exchange houses at Tk 107 per USD. But some banks have even offered more than the ceiling. Between July and January, expatriate Bangladeshis sent remittances amounting to $12.45 billion, up 4.25 percent year-on-year.

Missing independent candidate in one of the six by-polls held this week, to Brahmanbaria-2 constituency, Abu Asif Ahmed was traced in the capital's Bashundhara area five days after he went missing from his electoral area, police said a day after the polls. Mohammad Shakawat Hossian, superintendent of police (SP) in the district, said they came to know about his whereabouts when they contacted the victim's wife Meherunnesa for their investigation over his disappearance. Asif, former president of Ashuganj Upazila unit BNP, was the main opponent for expelled BNP leader Abdus Sattar Bhuiyan, who was tacitly backed by the government to run in the by-election after resigning as part of BNP's collective decision to resign from parliament.

Sattar has now been elected as an independent. Three of the other by-elections were won by Awami League candidates, another independent, and one by Jasad's Rezaul Karim Tansen, who saw off a spirited campaign by actor Hero Alom to win by just 834 votes.