BB buys $1.82b from banks in July-Oct

The central bank has directly purchased US$1.82 billion from the commercial banks in the first four months of the current fiscal year (FY), 2016-17, to help keep the inter-bank foreign exchange (forex) market stable.

The amount was slightly lower than that of the same period in last fiscal year (FY 16), when the Bangladesh Bank (BB) bought nearly $1.90 billion, according to its latest statistics.

The central bank, however, did not sell any single US dollar in the market during the period (July-Oct) under review due to lower demand for the greenback.

"We're yet to buy any US dollar from the commercial banks this month mainly due to higher demand for the greenback in the market," a BB senior official told the FE on Sunday.

"The BB will act in line with the market requirement," he said while replying to a query about further purchasing of the US dollar.

The central bank is continuously maintaining a market-based exchange rate policy to avoid excessive volatility, he further said, while explaining the main objective of its intervention in the market.

The BB official also said the central bank has purchased the greenback from the banks to protect the interests of exporters and migrant workers by keeping the exchange rate of the Bangladesh Taka (BDT) against the US dollar stable.

"Such purchase helped the banks to comply with the net open position (NOP) rules for holding foreign exchange properly."

"It has also helped the country's forex reserve to exceed $32 billion-mark for the first time following lower import payment obligations," he also added.

The country's foreign exchange reserve rose to $32.08 billion on Sunday, from $32.05 billion on the previous working day.

But the forex reserve is set to decrease within a couple of days after making a routine payment of $790 million to the Asian Clearing Union (ACU) against the imports of September-October period, another BB official said.

Under the existing provisions, outstanding import bills and interests thereof are to be paid at the end of every two months among the ACU member countries.

On the other hand, a depreciating trend of BDT against the greenback has been continuing since October 27 to meet the growing demand for the greenback before the end of this calendar year.

The US dollar was quoted at Tk 78.46 in the inter-bank forex market on Sunday against Tk 78.45-Tk 78.46 of the previous working day. It was Tk 78.40-Tk 78.42 on October 27.

"Most of the banks are now following a 'go-slow' policy in selling their greenback," a senior treasury official of a leading commercial bank told the FE.                              [email protected]