Dollar rate crosses Tk125 as fuel import payments rise

The rate has risen by more than Tk2.30 in three months, while letters of credit (LCs) were settled at Tk124.90-124.97 per dollar.

Last week, the central bank sold $122 million from reserves, but the supply was insufficient to ease market pressure. The dollar has been appreciating since early October.

Bangladesh Bank officials and bankers attribute the pressure mainly to rising payments for government fuel and petroleum imports. Since the Middle East war broke out in March, fuel prices have surged, with the Bangladesh Petroleum Corporation (BPC) now importing fuel at around $148 per barrel, against less than $90 before the war.

A senior Bangladesh Bank official said the BPC would need around $800 million for import payments in November.

Central bank data show overall import expenditure rose 15% in the first quarter of FY26 (July-September), while petroleum import costs increased 27.87% to $2.98 billion from $2.33 billion a year earlier. Separately, petroleum, oil and lubricant (POL) import expenditure surged 103% to $3.71 billion from $1.82 billion.

Bankers said the BPC and Petrobangla also face substantial import payment obligations this month, adding to dollar demand.

Remittances reached $30.80 billion in the first 10 months of this year, while exports stood at $41.09 billion and imports at $64.95 billion, according to Bangladesh Bank and Export Promotion Bureau data.

Between July and 9 November, remittances totalled $12.75 billion, up from $11.12 billion a year earlier. However, monthly inflows have remained below $3 billion for five consecutive months.

A Bangladesh Bank official said the central bank wanted to keep the dollar rate below Tk125, warning that further depreciation would raise import costs and fuel inflation.

Bankers said government payments and LC settlements for consumer goods imports ahead of Ramadan in February would add to pressure this month. In October, LC settlements totalled $5.95 billion, while new LCs worth $7.32 billion were opened.

Capital machinery, raw material imports decline

Imports of capital machinery and raw materials contracted in the first quarter of FY27, reflecting subdued private-sector investment.

Bank credit growth remained below 5% for seven consecutive months, standing at 4.14% in the latest period.

A senior private bank official warned that dollar demand could rise further when businesses increase imports of capital machinery and raw materials as economic activity picks up.