BB purchasing dollars from banks to keep market stable

The central bank increased purchase of the US dollar from the commercial banks directly aiming to keep the inter-bank foreign exchange (forex) market stable, officials said Wednesday.

 "We've expedited the purchase of US dollar from the banks to offset the higher inflow of foreign exchange in the market in the recent days," a senior official of the Bangladesh Bank (BB) told the FE.

He also said the central bank had purchased the US currency continuously from the banks to protect the interests of exporters and migrant workers by keeping the exchange rate of the local currency against the greenback stable.

As part of the move, the BB bought US$ 70 million from a Shariah-based Islami bank Wednesday at the market rate.

The US dollar was quoted at Tk 77.7500 in the inter-bank forex market on the day against Tk 77.7500-77.7525 on the previous working day, market operators said.

On Monday last, the central bank similarly purchased $ 76 million from the commercial banks on the same ground.

"The inflow of foreign exchange has increased recently because of lower import payments, the normal flow of inward remittance and higher growth in export earnings," the central banker explained.

He also said the inflow of credit to the private sector from overseas sources, foreign direct investment and portfolio investment also contributed to the rise in foreign exchange in the market.

A total of $2.794 billion was bought from the commercial banks during the period between July 1 and February 5 last of the current fiscal (FY) 2013-14 as part of the BB's intervention in the market.

The country's foreign exchange reserves stood at $ 18.20 billion Wednesday following the US dollar purchase.

 "We may continue purchasing the US currency from the banks in the near future as required," another BB official said without elaborating.