BB's USD sales to banks dip 89pc in H1 FY25

The Bangladesh Bank's dollar sales to commercial banks fell significantly during the July-December period of this fiscal year compared to the same period in FY24, according to a central bank report.
The report says the central bank sold a net $628.38 million to the foreign-exchange market during this period, a drop of nearly 89 per cent from $5.69 billion sold in the same period of the previous fiscal year.
Officials at the central bank familiar with the developments told The Financial Express the central bank had implemented several measures to stabilise the forex market, reducing the need for its intervention.
"Governor Ahsan H Mansur has encouraged banks to actively trade in the interbank market instead of relying on dollar sales from the central bank," said an official.
However, this policy has led to a reduction in commercial banks' foreign exchange holdings.
The Bangladesh Bank data reveals gross foreign exchange holdings by commercial banks declined 23.45 per cent year-on-year at the end of December 2024, standing at $4.255 billion compared to $5.55 billion in the same month of the previous year.
Besides, the December 2024 gross holdings were 2.92 per cent lower than that a month earlier, when they stood at $4.383 billion.
"This is a firm and bold step aimed at stabilising the forex market by minimising the central bank's interventions," the official said wishing anonymity.
He said the depletion of forex reserves has slowed, which is helping stabilise the market. "A stable forex market is crucial for managing inflation and ensuring a steady flow of imported commodities."
The official also pointed out that the previous governors during the ousted Awami League regime often relied heavily on dollar sales instead of fostering an active interbank market.
The Bangladesh Bank's gross forex reserves stood at $26.21 billion at the end of December 2024, slightly down from $27.13 billion in the same month of the previous year.
Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank, told The Financial Express the interim government has focused on stimulating interbank transactions since the beginning.
"The governor has emphasised remittance inflows and export receipts as critical sources to achieve forex stability," he said, adding this is the right step towards stabilising the market.
Rahman noted that banks have worked to attract more remittance inflows since then, adding, "High inflation has also played a role in reducing the central bank's dollar sales to the market."
BRAC Bank's Deputy Managing Director Md Shaheen Iqbal echoed Rahman, adding that the pressure on the forex market has reduced significantly.
He further said interbank transactions increased in recent months, reflecting positive momentum.

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