Foreign exchange reserves yesterday hit a new record of $42.09 billion thanks to the upward trend of remittance and lower import payments, Bangladesh Bank data showed.

The reserves, one of the major macroeconomic indicators of an economy, touched the $40-billion mark on October 8 and rose to $41 billion on October 28.

The reserves stood at $32.11 billion on December 15 last year.

There is no scope to be complacent due to the ballooning of the reserve as the collapse in demand and investment have hurt imports in recent months, experts said.

Remittance has been on the rise riding on the stagnation of the global 'hundi' cartel, an illegal cross-border financial transaction. The hundi cartel has been rendered ineffective across the globe due to the restrictions on movement imposed by countries to limit the spread of the coronavirus.

Between July and November, remittance earnings rose to $10.90 billion, up 41.32 per cent year-on-year.

At the same time, imports decreased by 12.99 per cent to $15.78 billion, and exports grew by 1.10 per cent to $12.54 billion.

The three indicators have elevated the reserves to record highs following the outbreak.

Monzur Hossain, research director of the Bangladesh Institute of Development Studies, a think-tank, said that the large volume of reserves is not being able to play a positive role in helping the economy at the moment due to the ongoing business slowdown.

"But the reserves will absorb shocks stemming from the risks related to the foreign exchange once the economy picks up," he added.

According to Shah Md Ahsan Habib, a professor of the Bangladesh Institute of Bank Management, the rise in foreign exchange reserves is without a doubt, a good indication for the economy.

"The reserves are usually considered as the brand of an economy. The global community initially judges the financial strength of a country by examining the volume of its reserves," he said.