BB buys another $149m to support exchange rate
In a bid to stabilise the exchange rate, the Bangladesh Bank has once again purchased US dollars from commercial banks through an auction.
The central bank is attempting to keep the dollar price from falling further by buying dollars directly from the banking sector.
On Thursday (11 December), the Bangladesh Bank bought $149 million at Tk 122.29 from 16 commercial banks.
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With this, the central bank's total purchase in the current fiscal year has reached $2.66 billion.
Chief Economist of Bangladesh Bank Mohammad Akhtar Hossain said, "If taka becomes stronger, exports and remittance inflow will fall while imports will rise. This would push the current account balance into the negative. The Bangladesh Bank is trying to maintain the dollar rate to support remittance and foreign income. By purchasing dollars, the bank is able to keep the rate stable."
Bankers say the decline in dollar prices is driven by several factors. The government's large external payment obligations have eased recently, reducing demand pressure. At the same time, slow growth in new business and investments has led to a fall in capital machinery imports.
By the end of September, private-sector credit growth had dropped to 6.29%, the lowest in history, indicating that imports have not picked up despite an adequate supply of dollars.
Meanwhile, remittance inflows have strengthened. By the end of November, expatriate Bangladeshis sent $2.89 billion, increasing the supply of dollars in the banking channel.
