The Bangladesh Taka (BDT) shed its value slightly against the US dollar in 2014 as the country had to make increased import payments in the last two months of the outgoing calendar year, bankers said.
In the process of exchange-rate adjustments, the taka depreciated 0.24 per cent against the dollar in 2014 due to higher demand for the greenback to settle import payments by the commercial banks.
The main international trading currency (US dollar) was quoted at Tk 77.95 on the inter-bank foreign-exchange (forex) market
Tuesday, the last working day of the year 2014.
A year back, according to the central bank statistics, the rate was Tk 77.75-Tk 77.77 on December 30, 2013,
"Our currency was very much stable in 2014 compared to other peers' group countries, including India," Kazi Sayedur Rahman, general manager of the Forex Reserve and Treasury Management Department of Bangladesh Bank (BB), told the FE.
"We expect that the BDT may remain stable against the greenback in 2015," Mr. Rahman said, without elaborating on the monetary outlook.
The depreciating trend of BDT against the US currency started in the middle of November and continued until the last working day of this calendar year due to higher import payments, according to the market operators.
The demand for the US currency increased in the last couple of months due to settlement of import payments for petroleum products, fertilisers, capital machinery, scrap vessels and other essential items, they added.
Earlier on November 24, the BB resumed intervention into the foreign-exchange market through selling the US dollar to the commercial banks directly--after nearly two years and a half--to keep the market stable.
As part of the move, the central bank has so far sold $357 million to the commercial banks to meet the growing demand for the greenback.
"The existing depreciating tendency of BDT against the US dollar may continue in the next calendar year," a senior treasury official of a leading private commercial bank told the FE.
During the first three quarters of 2014, the BDT had shown a trend of steady appreciation against the dollar, the US-based Citibank NA earlier said in its annual market update 2014.
In January, the greenback was traded at Tk 77.75, which steadily declined to Tk 77.63 by the end of the fiscal year (FY) 2013-14, and further depreciated to USD/BDT 77.40 by the end of September last, according to the update.
On the other hand, the weighted average call-money rate which was 7.17 per cent in January 2014 declined to 6.23 per cent in June as the inter-bank money market was flush with liquidity amid slow private credit growth, the Citibank NA said.
"From July onwards some demand for liquidity was evidenced in the market backed by domestic credit growth," it noted.
In October the weighted average call-money rate shot up to 8.41 per cent on account of the Eid-ul-Azha festival.
During that period, the BB injected fresh funds through special liquidity support to the primary dealer (PD) and non-PD banks.
The call-money rate hit 9.50 per cent Tuesday, the last working day of the calendar year 2014, because of higher demand for liquidity.
The call rate ranged between 7.00 per cent and 9.50 per cent on the day, unchanged from the previous working day.
However, most of the deals were settled at rates varying between 8.50 per cent and 9.50 per cent, according to the market operators.
"The call money rate may increase in 2015," a treasury official hinted.
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