BB boosts dollar buy to check pre-Eid forex volatility

The central bank has boosted purchase of the US dollar from banks before the Eid-ul-Fitr festival in an attempt to keep the inter-bank foreign exchange market stable, officials said.
The Bangladesh Bank (BB) bought US$315 million directly from the commercial banks in the first nine days of July, the first month of the current fiscal year (FY) 2015-16, as it seeks to rein in the potential volatility in the forex market.
"We've increased purchase of the US dollar from the banks to maintain a balance between supply and demand as inflow of the foreign currency ahead of the Eid rose," a BB senior official told the FE Saturday.
He also said the supply side of the foreign currency has improved during the period due to higher inflow of remittances along with steady growth in export income.
Bangladesh received $ 106.92 million as remittances between July 01 and July 03 from Bangladeshi nationals living and working abroad, according to the central bank's latest statistics.
The BB official expressed the hope that the inflow of remittances might exceed $ 1.20 billion by the end of this month if the existing trend of inward remittances continues.
Talking to the FE, another BB official said the central bank wants to protect the interest of both exporters and migrant workers by keeping the exchange rate of Bangladesh Taka (BDT) against the greenback stable.
He also said such purchase helps the banks to comply with the net open position (NOP) rules for holding foreign exchange properly.
"We may continue buying of the US dollar from the banks in line with the market requirement," the central banker said.
The BB bought $3.76 billion from the commercial banks in the last financial year.
In FY'14 and FY'13, the central bank had bought $5.15 billion and $4.54 billion respectively, the BB data showed.
The country's foreign exchange reserve jumped $24.55 billion on Thursday from $24.40 billion of the previous day after the US dollar purchase.
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