Currency swapping continues to replenish reserves

The upward trend in the foreign-currency (forex) reserve continues as the Bangladesh Bank (BB) has so far bagged $588 million from a dozen of commercial banks through a currency-swap mechanism.
Official sources at the BB said the central bank purchased the greenback from banks in just three days' currency-swap deals.
Inclusion of the latest deals under the arrangement helps increase the stock of foreign currencies, giving some respite to the economy under pressure because of quick depletion of forex reserves.
According to BB data, the gross forex reserves under the regulator's calculation method stood at $25.52 billion, while it was $20.50 billion in the IMF's arithmetic as of 27 February 2024.
Even on February 20, gross reserves under BB and IMF calculations were $25.33 billion and $20.17 billion respectively.
According to official statistics, on February 20, the first day of the three-day deal, the BB bought $155 million from the banks.
On February 22, commercial lenders sold more than $235 million to the banking regulator.
On the other hand, the deals' volume on the third day (February 27) was amounting to $198 million.
According to Md Mezbaul Haque, spokesperson for the central bank, currency swap has become a good instrument for commercial banks.
It helps them manage liquidity positively and allow them to buy more remittance with the local currency they got through selling the greenback.
"Some 12 commercial banks have sold $588 million to the central bank so far under the currency-swap deals," said Mr Haque, also an executive director of the BB.
Seeking anonymity, another BB official said currency swap was giving suggestions that the reserves would continue to grow, thus indicating a good sign for economy.
The central banker feels that currency swap proves to be a good option for the banks with a plenty of dollars.
"By using the window, commercial lenders now get local currency at a much lower rate," he says.

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