Banks purchasing remittances at Tk123 ahead of oil LC settlement
Several commercial banks in Bangladesh purchased remittances from remittance houses at Tk123 per dollar today, reflecting renewed pressure in the foreign exchange market ahead of large upcoming import settlements.
Senior bankers confirmed the development to The Business Standard. Earlier this week, banks had been buying remittance at rates between Tk122.85 and Tk122.90 per dollar.
Bank officials said the marginal increase in the buying rate is largely driven by anticipated foreign currency demand next week, when major import letter of credit (LC) settlements by the Bangladesh Petroleum Corporation (BPC) and Petrobangla are due.
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They also noted that remittance inflows are typically stronger in the first half of each month, while flows tend to slow between the 15th and 25th. As a result, banks expect tighter dollar liquidity in the coming days.
Despite sufficient overall dollar supply in the market, some banks have recently been offering slightly higher rates to secure remittance inflows, officials said. This comes even after the Bangladesh Bank verbally advised banks earlier this month not to purchase dollars above Tk122.90.
Market participants also warned that dollar demand could rise further next week due to the scheduled large payments, potentially putting mild upward pressure on exchange rates.
In the past two weeks, the Bangladesh Bank has purchased $180 million from commercial banks as part of its reserve management strategy. The central bank's reserves currently stand at $30.48 billion.
A senior Bangladesh Bank official said there is adequate dollar liquidity in the market, which is why the central bank has been able to continue purchasing foreign currency from banks to strengthen reserves.
