Dollar purchases rise to stabilise taka

The central bank purchased more than US$6.0 billion from banks over the past 10 months to help maintain stability in the dollar-taka exchange rate and support both exporters and remittance earners.

As part of its open market operations, Bangladesh Bank (BB) has intensified direct dollar purchases from banks to stabilise the exchange rate of the US currency against the Bangladesh Taka (BDT) amid higher remittance inflows ahead of Eid-ul-Azha.

Under the ongoing intervention, the central bank bought another $85 million from six commercial banks through an auction in the interbank spot market on Tuesday for the same purpose.

The latest amount was purchased under the Multiple Price Auction method, with the cut-off rate set at Tk 122.75 per dollar, according to officials. Earlier on Monday, the central bank purchased $100 million from a similar number of banks through another auction.

According to official data, the BB bought a total of $185 million over the past two days, following another $130 million purchased last week.

"We've stepped up our market intervention to offset the higher inflow of remittances ahead of Eid," a senior BB official told The Financial Express, explaining the latest market situation.

The inflow of inward remittances grew by more than 35 per cent to $2.18 billion during May 01-17 this calendar year, up from $1.61 billion during the same period last year.

The central banker also said such intervention helps keep the exchange rate of the US currency against the BDT stable, which in turn encourages both exporters and remitters.

"The intervention is also playing a role in improving the country's foreign exchange reserve position," the BB official noted.

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