Written by The Banking Post
Bangladesh Bank (BB) sold around $201 million in the interbank market on Thursday to stabilise the foreign exchange market and curb the rising dollar rate, bankers said.
The taka has been under pressure over the past few months amid growing demand for the US dollar to settle import payments, particularly for fuel and essential commodities ahead of Ramadan.
Despite the latest dollar injection through an auction, the taka weakened further in the interbank market.
Three bankers familiar with the development said the central bank’s auction committee sold a total of $201 million to meet market demand.
A treasury official of a private bank said a gap between dollar supply and demand had emerged in the market, while foreign exchange houses were quoting higher rates. The central bank intervened to ease the pressure and stabilise the market, he added.
The weighted average interbank exchange rate rose to Tk124.75 per dollar on Thursday, up from Tk124.65 a day earlier. A month ago, the dollar was trading at Tk123.28, according to Bangladesh Bank data.
The foreign exchange market had remained relatively stable for several months until the fourth week of June, with the exchange rate holding at Tk122.75 per dollar. However, the taka began losing value against the greenback from 28 June.
Bangladesh Bank resumed dollar sales in September after a gap of more than 14 months, as demand for the US currency increased and pressure on the exchange rate intensified.
With the latest intervention, the central bank has sold around $420 million from its foreign exchange reserves to support the taka and contain exchange rate volatility.
