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BDT deflates notably against US$

BB sells $85m to banks to keep market stable

Siddique Islam | February 12, 2019 00:00:00

The exchange rate of the Bangladesh Taka (BDT) depreciated significantly against the US dollar on Monday, mainly due to higher demand for the greenback in the market for settling the import bills.

The local currency deflated by 10 poisha in the country's inter-bank foreign exchange (forex) market on the day after more than a month, market operators said.

The US dollar was quoted at Tk 84.05 each in the inter-bank forex market on Monday against Tk 83.95 of the previous working day, they said.

BDT faced the depreciation, although the Bangladesh Bank (BB) sold US$ 85 million to the commercial banks on the day for keeping the forex market stable.

"We've sold the US dollar to three state-owned commercial banks (SoCBs) for making import payments, particularly for fuel-oils, LNG (liquefied natural gas) and Rooppur Nuclear Power Plant (NPP)," a senior official of BB told the FE.

The exchange rate has been re-fixed in line with the market requirement, the central banker explained.

"We're continuously providing such foreign currency support to the banks for making import payment obligations against the essential items," he added.

A total of $1.55 billion has been sold since July 01 of the current fiscal year (FY), 2018-19, to the commercial banks as part of BB's ongoing support, according to latest data.

The central banker also said BB might continue providing such foreign currency support to the banks in line with the market requirement.

On January 03, the local currency depreciated by five poisha against the greenback in the inter-bank forex market on the same ground.

The greenback was quoted at Tk 83.95 each in the market on the day against Tk 83.90 of the previous working day.

"The country's overall export earnings and inward remittance flow will boost up following depreciation of the local currency against the US dollar," Syed Mahbubur Rahman, Chairman of Association of Bankers, Bangladesh (ABB), told the FE.

Such depreciation will increase cost of import, the senior banker added.

On the same day, the exchange rate of BDT depreciated by 17 poisha against the US currency at customer level for settling import bills.

The exchange rate of the US dollar rose to maximum Tk 84.12 each for sale of Bill for Collection (BC) on the day from maximum Tk 83.95 of the previous working day, according to the operators.

Talking to the FE, M A Halim Chowdhury, Managing Director and Chief Executive Officer of Pubali Bank Limited, said the local currency may depreciate further in future following the overall market situation.

The demand for the US dollar is gradually increasing, mainly due to higher import payment pressure, particularly of capital machinery for power plants, intermediate goods, petroleum products and LNG.

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