Bangladesh Bank buys $115m more to stabilise forex market
With the latest purchase, Bangladesh Bank’s total dollar purchases in the current fiscal year have reached $3.46 billion
Bangladesh Bank has purchased another $115 million from commercial banks through auction to stabilise the foreign exchange market.
The central bank bought the dollars from three banks today (28 December) at a rate of Tk122.30 per dollar.
With the latest purchase, Bangladesh Bank's total dollar purchases in the current fiscal year have reached $3.46 billion. Of this amount, $920 million was bought in December alone.
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Bangladesh Bank began buying dollars through auctions in July this year as part of its strategy to intervene in the foreign exchange market.
Under its market-based exchange rate framework, the central bank aims to maintain balance in the market – allowing the dollar price to fall when supply is high and demand is weak, while allowing prices to rise when demand increases.
Bankers said the recent decline in dollar demand is due to several factors. They said the easing of large government foreign payment obligations has reduced demand for foreign currency. Slower business activity and investment have also led to lower imports of capital machinery.
Despite adequate dollar availability, private sector credit growth fell to a record low of 6.23% at the end of October this year, indicating subdued import activity.
Meanwhile, remittance inflows have shown a positive trend.
