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Bangladesh’s foreign exchange market came under renewed pressure in October as the government paid an additional $1 billion to settle import bills, mainly for fuel oil, gas and electricity.

The taka weakened to Tk124 against the US dollar on the last working day of October, from Tk122.92 on October 1, according to Bangladesh Bank (BB) data.

A senior BB official said the government cleared about $2.5 billion in import payments for fuel oil, gas and electricity during the month, compared with an earlier estimate of $1.5 billion.

The higher bill was driven largely by volatility in global energy prices amid geopolitical tensions, he said.

The official expects total import payments through letters of credit (LCs) to exceed $7 billion in October, up from $6.32 billion in September and $6.18 billion in August.

“The local currency remained under depreciation pressure against the US dollar in October, mainly due to increased pressure on the foreign exchange market from the government’s higher import payment obligations,” the BB official said.

To contain the pressure, the central bank intervened twice during the month, selling $142 million to commercial banks through auctions.

The official expects pressure to ease somewhat this week following the interventions, with higher remittance inflows also likely to provide support.

A senior treasury official at a public bank said remittances typically rise during the first 10 days of a month. He suggested that the central bank closely monitor the foreign exchange market as well as rates offered by money changers and exchange houses for remittance sales.

Another treasury official at a leading private bank said BB should sell dollars from its reserves when necessary to smooth excessive market pressure. However, he warned that import-payment costs could remain elevated in the coming months, particularly ahead of Ramadan, when Bangladesh typically imports more essential commodities to meet higher consumer demand.

The pressure is already visible in the energy import bill. Actual LC-settled payments for petroleum products rose 26 per cent to $2.93 billion in July-September of FY2026-27, from $2.33 billion in the same period a year earlier.

Fuel oil imports also increased 6.42 per cent to $10.68 billion in FY2026 from $10.03 billion a year earlier.

Global energy prices have added to the strain. Brent crude stood at $112.33 a barrel on October 30, up 1.38 per cent on the day and 9.79 per cent over the previous month. The benchmark settled at $116.72 on October 23, its highest closing price since April.

LNG costs are also significantly higher than under some older supply contracts. Bangladesh can procure LNG from certain long-term suppliers at around $14 per MMBtu under pre-crisis agreements, while newer long-term contracts are costing more than twice that amount.

Market insiders said the price is currently around $30 per MMBtu for LNG supplied under newer long-term contracts linked to the Japan-Korea Marker (JKM), a benchmark also used in spot-market pricing.

With energy imports accounting for a substantial share of the country’s import-payment obligations, sustained price increases could keep pressure on the foreign exchange market and the taka in the months ahead.