BB expedites US dollar purchase

Siddique Islam | Published: June 19, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

The central bank has expedited purchase of the US dollars from commercial banks to offset higher inflow of foreign exchange ahead of the holy Ramadan and Eid-ul Fitr festival, officials said.
As part of the latest moves, the Bangladesh Bank (BB) bought US$50 million from three commercial banks directly on Thursday aiming to keep the inter-bank foreign exchange (forex) market rate stable.
On June 16 last, the central bank similarly purchased $50 million from five commercial banks on the same ground at market rate, they added.
The US dollar was quoted at Tk 77.80 in the inter-bank forex market on the day, unchanged from the previous level, market operators said.
"We're purchasing the US dollars from the banks to protect the interests of exporters and migrant workers by keeping the exchange rate of the Bangladesh Taka (BDT) against the US dollar stable," a BB senior official told the FE.
He also said such purchase also helps the banks to comply with the net open position (NOP) rules for holding foreign exchange properly.
The supply side of the foreign currency has improved recently mainly due to higher inflow of remittances along with steady growth of export earnings, the central banker explained.
Bangladesh received $604.16 million as remittances between June 01 and June 12 from Bangladesh nationals who are working abroad, according to the central bank's latest statistics, released Thursday.
"We expect that the inflow of remittances may cross $ 1.30 billion by the end of this month ahead of the Eid-ul Fitr, the biggest religious festival of the Muslims," the BB official said.
The remittances from Bangladesh nationals working abroad were estimated at US$1.32 billion in May 2015, up by $21.40 million from the level of the previous month. In April last, the remittances stood at $1.30 billion. It was $1.21 billion in May, 2014.
"We may continue such intervention in line with the market requirement," the central banker said without elaborating.
A total of $3.45 billion was bought from the commercial banks between July 2 and June 18 of the outgoing fiscal year (FY) 2014-15 as part of the BB's intervention in the market.
The central bank purchased a record $5.15 billion from the banks in the FY 14 on the same ground, the BB data showed.
The country's foreign exchange reserve rose to $24.64 billion Thursday from $24.49 billion of the previous day following the US dollar purchase.
On the other hand, falling trend of the country's overall imports continue following lower prices of essential commodities including fuel oil in the global market, another BB official said. Â
"The existing trend of inter-bank forex market may continue unit the Eid festival," a senior official of a commercial bank told the FE.
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