BB buys over $2.5b so far in FY26 to stabilise exchange rate

The Bangladesh Bank has purchased more than $2.5 billion so far in the current FY2025-26 as part of an intensified effort to stabilise the exchange rate.

In its latest purchase today (9 December), the central bank bought $202 million from 13 commercial banks at a rate of Tk122.29 per dollar. 

Officials said Bangladesh Bank resumed buying dollars from commercial banks in July as part of its strategy to prevent excessive depreciation of the taka.

When dollar supply exceeds demand, the exchange rate tends to fall; conversely, when demand outpaces supply, the dollar price rises.

Bankers point to several factors behind the recent decline in dollar demand. The government's requirement for large foreign payments has eased in recent weeks, reducing overall pressure on the market. The level of payments currently is noticeably lower than what was seen about two weeks ago, they said.

In addition, new business and investment activity in the country has slowed significantly. Entrepreneurs are hesitant to make fresh investments, resulting in a stagnation in industrial and commercial activities and a sharp drop in capital machinery imports.

Private sector credit growth fell to 6.29% at the end of September – one of the lowest readings on record. Despite banks having an adequate supply of foreign currency, demand for machinery imports remains weak, bankers said.

Meanwhile, remittance inflow has increased, further boosting supply in the banking system. Expatriate Bangladeshis sent home $2.89 billion in November, easing pressure on the foreign exchange market.

Bankers say the combination of lower payment pressure, declining imports, and rising remittances has contributed to a more stable dollar market, enabling the central bank to purchase dollars to maintain the exchange rate within its desired band.