Written by The Banking Post
As part of the country’s foreign exchange (forex) market stabilisation moves, Bangladesh Bank (BB) on Thursday purchased $176.50 million more from the commercial banks.
With the latest interventions, the central has so far been bought $798.50 million from the commercial banks since July 13 last under the prevailing free-floating exchange rate regime.
According to the BB sources, the banking regulator took the decision to make fresh intervention as exchange rate in interbank spot market continues to fall. With the latest bidding, the BB injected around Tk 21.44 billion to the fifteen commercial banks against buying of $176.50 million.
The cut-off rate for the latest transaction was Tk 121.50 per dollar.
Over the past one week, the central bank has bought a total of $798.50 million through six separate auctions. These purchases are intended to bolster the country’s foreign exchange reserves, which have come under pressure amid rising import payments and global economic headwinds in the recent past.
The BB launched this intervention drive on July 13 in a bid to curb volatility in the dollar-taka exchange rate and ensure greater stability in the forex market.
Seeking anonymity, a BB official said, a total of 17 commercial banks participated in the bidding and 15 banks submit bids of Tk 121.50 per dollar, which they have accepted and purchased the volume of the US dollar.
He said the central bank may also sell US dollars to banks via similar mechanisms if the dollar continues to appreciate against the local currency.
The central banker said the intervention normally comes to prevent the downfall of Bangladeshi Taka-US-Dollar exchange rate and to bolster the foreign currency reserve in line with the prescription of IMF (international monetary fund) under its $5.50 billion lending package to stbailise the country’s macroeconomic situation.
