Written by Takie Mohammad Jubayer
Interbank traders now turn their intensified focus to US dollar again amid free-floating exchange rate regime, vibrating interbank forex (foreign exchange) transactions to a great extend in recent times.
Even few months ago, the commercial banks showed more interest in purchasing Euro instead of the American greenback to avert exchange rate shocks stemmed from heavily controlled crawling-peg regime.
But things started reversing completely for the last couple of months until June, 2025 after the central bank revised the crawling peg system with embracing a more flexible exchange rate regime, allowing the lenders to quote freely for sourcing US dollar.
According to statistics collated from market players, banks made outright transactions of US dollars amounting to $175.73 million on the spot market in March last while the volume of Euro they traded was €446.23 million.
Since then, US dollar started dominating the country’s forex market again with the volume rose $262.69 million, $508.89 million and $1115.41 million in April, May and June last respectively.
On the other hand, the outright trades of Euro in the forex spot market dropped remarkably to record € 247.00 million, €82.72 million and €2.10 million in April, May and June, 2025 respectively.
Seeking anonymity, a BB official said the forex trades by the banks in the spot market kept vibrating since May last when Bangladesh Bank (BB), the country’s central bank, introduced a free floating exchange rate amid undisclosed band.
The official said daily average spot transaction in June, 2025, rose substantially to $68.7 million, which was around $7.5 million in March and April of 2025.
The share of spot transactions increased to 37.7 per cent in June 2025 from 13.2 per cent in April 2025 and 16.5 per cent in May 2025, the central banker said.
