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The US dollar has crossed Tk125 in Bangladesh’s banking system as rising fuel import payments continue to strain the foreign exchange market, despite efforts by Bangladesh Bank to contain the exchange rate.

Several commercial banks purchased remittance dollars from exchange houses at Tk125.10-125.15 on 10 November, while import-related letter of credit (LC) payments were settled at Tk124.90-124.97 per dollar.

The greenback has appreciated by more than Tk2.30 over the past three months. Last week, Bangladesh Bank sold $122 million from its reserves to ease pressure on the market, but the move failed to significantly improve dollar supply.

Bankers and central bank officials attribute the latest pressure largely to growing payments for government fuel and petroleum imports.

The situation has intensified since the Middle East conflict escalated in March, pushing up global energy prices. Officials said the Bangladesh Petroleum Corporation (BPC) is currently importing fuel at around $148 per barrel, compared with less than $90 before the conflict.

According to a senior central bank official, BPC alone is expected to require about $800 million for import payments this month.

Fuel imports drive up dollar demand

Bangladesh Bank data show overall import expenditure increased 15% in the first quarter of FY26, while petroleum import costs rose 27.87% year-on-year to $2.98 billion.

Spending on petroleum, oil and lubricants (POL) recorded an even sharper increase, surging 103% to $3.71 billion from $1.82 billion a year earlier.

Bankers said large import payment obligations of both BPC and Petrobangla are adding to the demand for dollars in the market.

They also warned that pressure could intensify further as businesses increase imports ahead of Ramadan and settle consumer-goods import bills.

In October alone, banks settled LCs worth $5.95 billion and opened new LCs amounting to $7.32 billion.

Remittance growth fails to ease pressure

Remittance inflows remain strong, reaching $30.8 billion during the first 10 months of the year.

Between July and 9 November, expatriate Bangladeshis sent home $12.75 billion, up from $11.12 billion during the same period a year earlier.

However, monthly remittance receipts have remained below the $3 billion mark for five straight months, limiting their impact on easing dollar market pressure.

During the same period, exports totalled $41.09 billion, while imports reached $64.95 billion.

A Bangladesh Bank official said the central bank wants to keep the exchange rate below Tk125, noting that further depreciation of the taka would increase import costs and add to inflationary pressures.

Weak investment keeps imports subdued

Despite rising fuel imports, demand for capital machinery and industrial raw materials remained weak.

Imports of both capital machinery and raw materials declined in the first quarter of FY27, reflecting sluggish private-sector investment and subdued business expansion.

Bank credit growth has remained below 5% for seven consecutive months, standing at 4.17% in the latest reporting period.

Bankers cautioned that dollar demand could rise further if economic activity accelerates and businesses resume larger-scale imports of machinery and industrial inputs.