Depreciating tendency of the Bangladesh Taka (BDT) against the US dollar increased on the last two working days as there were increasing import payment obligations before ending this calendar year, bankers said.
The BDT depreciated by 0.02 per cent against the US dollar Tuesday last following an increased demand for the greenback to settle import payments by the commercial banks.
The US dollar was quoted at Tk 77.91-Tk 77.92 in the inter-bank foreign exchange market on the day against Tk 77.90 of the previous working.
Such trend of US$/BDT exchange rate remained unchanged Wednesday, according to the market operators.
"The central bank sold US$52 million to the commercial banks directly during the period under review to ensure stability in the country's foreign exchange (forex) market," a senior official of the Bangladesh Bank (BB) told the FE Thursday.
He also said the existing trend of US$/BDT exchange rate may continue until the last working day of the outgoing calendar year.
Talking to the FE, a senior treasury official of a leading state-owned commercial bank (SoCB) said the depreciating trend of BDT against the US currency started in the middle of November last and continued until middle of this month due to higher import payments.
"The demand for US dollar increased suddenly on the last two working days for making their import payments for petroleum products, fertilisers and other essential items," the SoCB official explained.
Earlier on November 24 this year, the central bank resumed intervention in the foreign exchange market through selling of 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 $280 million to the commercial banks to meet the growing demand for the greenback.
"We may continue such intervention in line with the market requirement," another BB official told the FE without elaborating.
The demand for the US currency had picked up mainly due to higher import payments particularly for petroleum products, fertiliser, capital machinery and scrap vessels.
Besides, over $250 million was paid so far for the Padma Bridge that has created an additional pressure on the forex market, according to the bankers.
"Dividend transferred by the multinational companies also put pressure on the market last week," a senior official of a foreign commercial bank told the FE.
He also said the depreciating trend of the BDT against the US dollar increased in the last couple of days as most of the banks want to keep their overall fund position surplus on the last working day.
During the first three quarters of 2014, the BDT showed a trend of steady appreciation against US dollar, the US-based Citibank NA said in its annual market update 2014.
In January, the greenback was traded at Tk 77.75, which steadily declined to Tk 77.63 by the end of the fiscal year (FY) 2013-14, and further depreciated to USD/BDT 77.40 by the end of September last, according to the update.
"Weak demand for US dollars to settle import payments, rising trend of foreign direct investment (FDI) and strong export earnings had virtually contributed to Taka's appreciation during that period," the Citibank NA explained.
The central bank had purchased US$ 5.15 billion from the commercial banks in FY 14, which is the highest amount of US dollars bought from the market by the BB since FY 05, according to the update.
"The BB's interventions in the foreign exchange market have limited the loss of external competitiveness by stemming any significant nominal appreciation of the Taka," it noted.
However, the trend was reversed from November onwards as the US dollar clawed back against BDT, the update said.
The BB data indicated sluggish exports growth and significant growth in import payments in the current fiscal, primarily for capital machinery and petroleum, which increased the demand for US dollar.
It also said the US dollar demand was further fuelled by large advance payments for different components of the mega project Padma Bridge.
"To stabilise the market and avoid excessive volatility according to the goal set out in the Monetary Policy Statement, the BB sold dollars to several commercial banks after a gap of two and a half years," the update said.
During mid-December, USD/BDT was traded at around Tk 77.90 levels, according to the update.
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