Dollar gains over Tk0.16 in six days

The exchange rate of the US dollar has increased by more than Tk0.16 over the past six days, surpassing the Tk122 mark. The average interbank rate on Wednesday stood at Tk 122.07 per dollar, according to Bangladesh Bank data.

For comparison, the interbank rates were Tk121.95 on Tuesday, Tk121.90 on Monday, Tk121.87 on Sunday, and Tk121.84 on last Thursday (16 October).

Bangladesh Bank spokesperson Arif Hossain Khan said, "There has been no significant change in the dollar rate. So, I won't make any comments now."

Treasury heads of several private banks told TBS that banks bought dollars at Tk121.80 on 14 October. According to them, the central bank's repeated dollar purchases from commercial banks at the same rate in multiple auctions signal its expectation of a higher dollar rate, which has pushed the interbank rate above Tk 121.80.

Mohammad Ali, managing director of Pubali Bank, said that the Bangladesh Bank has purchased over $2 billion in the past three months. With increasing remittance and export earnings, the supply of dollars in banks remains adequate.

He said that the dollar rate is currently at a normal level. The slight increase is due to interbank activity. With sufficient dollar supply in banks, this rise is not a concern. 

The Bangladesh Bank is buying dollars from commercial banks through auctions to strengthen its reserves, so such fluctuations are perfectly normal, Ali added.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said that while the Bangladesh Bank wants the dollar rate higher, the increase in government payments has also contributed to the rise in the dollar rate.

A treasury officer at a state-owned bank said, "The Bangladesh Bank bought dollars through auctions, and LC payments had to be made. As a result, banks needed dollars, which pushed the price up slightly. It is not the case that the dollar rate rose solely due to import demand."

Bangladesh Bank started buying dollars from commercial banks in July when the dollar supply rose. With greater availability, the dollar rate had begun to fall. To keep it above Tk 121.50, the central bank conducted additional auctions to purchase more dollars.

In September this year, the volume of letters of credit (LCs) opened in the country reached $6.3 billion, up 17.29% from August's $5.38 billion, according to Bangladesh Bank's monthly economic indicators report. 

Although this September increase marked a rise in import activity after eight months, it remains below January 2025's $6.84 billion in LCs.