On 14 September, it sold $11.5 million.
File photo of Bangladesh Bank. Photo: Salahuddin Ahmed/TBS
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File photo of Bangladesh Bank. Photo: Salahuddin Ahmed/TBS
Bangladesh Bank has sold $20 million from its foreign exchange reserves to commercial banks after the dollar rate apparently threatened to cross Tk124 yesterday.
This is the second time the central bank has sold dollars in the current fiscal year. On 14 September, it sold $11.5 million.
Bangladesh Bank sold dollars at Tk123.65 each, compared with Tk122.80 per dollar during its previous sale, an increase of 85 paisa, a senior central bank official told TBS.
A senior commercial bank official told this newspaper that commercial banks had been buying dollars from exchange houses at higher rates.
Fearing that the exchange rate could rise further if banks continued purchasing dollars at those rates, Bangladesh Bank sold dollars at Tk123.65 each, he said.
Infographic: TBS
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Infographic: TBS
However, the intervention did not bring down the rate by the end of the day, the official said. Though banks could previously buy dollars from exchange houses at Tk123.60, they had to pay Tk123.70 per dollar by the end of yesterday.
The official attributed the increase to the central bank selling only a small volume of dollars at a relatively high rate, adding that the dollar rate had been rising by around 10 paisa daily over the past week.
On Sunday, the rate for settling letters of credit stood at Tk123.70-Tk123.80 per dollar, while the rate for purchasing remittances was also Tk123.70-Tk123.80.
Another senior commercial bank official said the upcoming five-day public holiday might have contributed to the increased demand, as banks sought to hold dollars in their nostro accounts to meet payment obligations.
Petrobangla and the Bangladesh Petroleum Corporation have payments due after the holiday, the official added.
A senior Bangladesh Bank official said the intervention signalled that the central bank would sell dollars from its reserves if the exchange rate continued to rise. The bank does not want the rate to cross Tk124, partly because higher import costs could fuel inflation.
The official said rising fuel prices had increased demand for dollars, as importing the same quantities of fuel oil and fertiliser now costs more.
Higher fuel import costs contributed to more than $8 billion worth of LCs being opened in September, the highest monthly figure in 53 months, the official added.
Bangladesh’s merchandise imports grew by more than 12% year-on-year in July and August of FY27 to $12.20 billion, according to balance of payments data. The merchandise trade deficit reached $3.82 billion during the period as import expenditure exceeded export earnings.
Meanwhile, expatriate Bangladeshis sent $1.74 billion in remittances in the first 17 days of October, according to Bangladesh Bank data.
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