BB goes on big buy of dollar

The central bank has gone on a big buy of the US dollar from banks to prop up the inter-bank foreign-exchange market amid a higher inflow of the greenback ahead of Eid-ul-Azha.
Officials said under the latest interventional move, the Bangladesh Bank (BB) bought US$100 million direct from six commercial banks Thursday "to protect the interests of exporters and migrant workers" by keeping stable the exchange rate of the local currency against the greenback.
The dollar was quoted at Tk 78.40 on the inter-bank forex market, marking no change in the price level, market operators said.
On Tuesday, the central bank also purchased $40 million from three banks on the same ground.
The central bank purchased $255 million between August 01 and 18 from the banks while $441 million was bought in the month of July, the BB data showed.
 "We've strengthened the purchase of dollar from the banks aiming to offset higher inflow of the foreign currency ahead of the Eid," a BB senior official told the FE Saturday.
He also said the supply side of the foreign currency is improving gradually following an upturn in inward remittances and higher realisation of
export proceeds by the exporters before the holy fiesta.
Bangladesh received nearly $504 million in remittance during the first 12 days of this month from Bangladeshi nationals living and working abroad, according to the central banker.
He expects the flow of inward remittances to cross $1.30 billion by the end of this month.
In July, the country received more than $1.0 billion as remittances.
Talking to the FE, another BB official said such purchase also helps the banks to comply with the net open position (NOP) rules for holding foreign exchange properly.
He also said the BB may continue buying the US dollar from the banks in line with the market requirements.
"We're compelled to sell our excess foreign exchange to the BB despite enhancement of the NOP limit in the last month," a senior treasury official of a leading private commercial bank told the FE.
Earlier on July 28, the central bank increased the NOP limit more than 11 per cent to $1.51 billion from $1.36 billion earlier for all the banks to manage the foreign-exchange market.
"The inflow of the US currency is improving gradually following lower import-payment obligation because of falling trend in commodity prices, including that of fuel oils, on the global market," the private banker explained.
A total of $696 million was bought from the commercial banks between July 11 and August 18 of the current fiscal year (FY) 2016-17 for offsetting the impact of its increased supply to the market, the BB data showed.
The country's forex reserves reached $30.73billion on Thursday from $30.60 billion on the previous day following the purchase of US dollar.
The central bank of Bangladesh bought $4.13 billion from the commercial banks in the last FY. It bought $3.76 billion and $5.15 billion in FY 15 and FY 14 respectively.
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