Central bank buys dollars to steady taka

The central bank purchased a further US$141.50 million through an auction from 13 banks on the interbank spot market on Monday, aiming to stabilise the exchange rate of the US dollar against the local currency.
The amount was bought under the Multiple Price Auction method, with a cut-off rate of Tk 122.30 per dollar, according to Bangladesh Bank officials.
The cut-off rate stood at Tk 122.29 per dollar at the previous auction held on December 11.
The Bangladesh Bank (BB) has so far bought US$2.80 billion directly from banks since July 13 under the prevailing free-floating exchange rate arrangement, the central bank's latest data showed.
"We are purchasing US dollars from commercial banks to help stabilise the exchange rate, which in turn supports export earnings and remittance inflows," a senior BB official told The Financial Express (FE), explaining the rationale behind the central bank's intervention in the foreign exchange market.
He added that some banks, including those facing liquidity stress, have received local currency, Bangladesh Taka (BDT), by selling US dollars to the central bank.
"Such interventions are also helping to strengthen the country's foreign exchange reserves," the central banker said.
Meanwhile, Bangladesh's gross foreign exchange reserves rose to US$32.12 billion on December 11 from US$31.89 billion a day earlier, based on the central bank's traditional calculation.
Under the International Monetary Fund's Balance of Payments and International Investment Position Manual, sixth edition (BPM6), reserves increased to US$27.45 billion from US$27.22 billion over the same period, according to Bangladesh Bank data.
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