Bangladesh Bank sold $205 million from its foreign exchange reserves to commercial banks through an auction today (12 November), bringing down the dollar rate offered by remittance houses to below Tk125.
The central bank sold the dollars at Tk124.74 each and instructed participating banks not to resell the purchased dollars in the interbank market, warning that such transactions could disrupt the foreign exchange market.
Earlier this month, Bangladesh Bank sold $120 million at Tk124.30-Tk124.35 per dollar.
After selling the dollar, the reserve position stood at $29.82 billion, down from $30.12 billion yesterday. Arief Hossain Khan, spokesperson for the central bank, has confirmed the matter.
A senior commercial bank official said remittance houses had offered dollars to banks at Tk125.30-Tk125.40 this morning, with some banks purchasing them at Tk125.30-Tk125.32.
However, following the central bank’s auction, several commercial banks bought dollars at Tk124.90-Tk124.95, while some secured rates below Tk124.90.
Another senior banker said remittance houses began offering dollars below Tk125 after Bangladesh Bank released $205 million into the market, helping ease exchange rate pressure. However, he said the central bank should plan such interventions more prudently.
He noted that the central bank issued the auction notice at 1:20pm. Had it been announced in the morning, the dollar rate could have fallen further, particularly as demand for foreign currency is generally higher at the beginning of the month. Banks also need time to arrange funds to buy dollars, he added.
Another commercial bank official said banks had purchased more than $300 million from remittance houses today, partly because rising fuel prices had increased import costs and the amount of foreign currency needed to pay for oil imports.
A senior banker said $205 million is a substantial amount and argued that releasing a similar volume several days earlier could have prevented the dollar rate from crossing Tk125. He also called for the central bank to analyse how much foreign currency should be released to help stabilise the market.
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