Recent robust growth (40.6% during July-March FY2011) in import spending made a situation that now Bangladesh is able to pay around 3.5 months of its import payments with its current foreign reserves (US$11.1 billion on May 3) despite the fact that export growth was also significant. Import payments has been rising due to higher food and petroleum prices at the international market, higher petroleum imports for diesel-based power plants and higher capital machinery imports because of rebound foreign demand for Bangladeshi products. Foreign reserves are under pressure not only due to higher import payments, but also lower growth in remittance inflows.
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