Written by The Banking Post
Finance Adviser Dr Salehuddin Ahmed on Tuesday backed Bangladesh Bank’s recent mop-up of nearly $2 billion from the market, saying the central bank acted wisely to maintain exchange rate stability despite a temporary dip in dollar demand.
Addressing reporters after meetings of the Advisors Council Committee on Government Purchase and the Advisors Council Committee on Economic Affairs, he acknowledged that importers—particularly of raw materials and capital machinery—may feel pressured by the move.
“Some argue that if dollar demand falls, its price should also drop. But letting the exchange rate slide unchecked would send the wrong signal to remittance senders. Remittances are one of our strongest lifelines, and we must protect their interests,” he said.
The adviser stressed the need for sufficient reserves to handle emergencies. “Our reserves are not yet self-sufficient. Imagine a crop failure requiring immediate imports—what would we do without a cushion? Foreign exchange isn’t just for imports, it’s a shield against unexpected shocks,” he noted.
Recalling the 2007-08 crisis, he said Bangladesh survived both global and domestic pressures thanks to reserve buffers. “That experience reminds us why the central bank is acting prudently now.”
Bangladesh Bank has recently accelerated its dollar purchases from commercial banks, lifting reserves to $25.67 billion as of September 11, up from $24.50 billion a year earlier, according to IMF calculations.
BB data shows dollar purchases through auctions have already hit $1.74 billion in the current fiscal year. Stronger remittances and export earnings have aided the build-up.
In contrast, over the three years to FY25, the central bank sold more than $25 billion from reserves to finance fuel, fertiliser, and food imports. After the fall of the Awami League-led government last August, BB halted dollar sales for government imports amid depleting reserves.
In May, the central bank introduced a floating exchange rate to meet IMF loan conditions, a year after rolling out a crawling peg.
