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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 public-sector import obligations, particularly for fuel oil, natural gas and electricity.

The higher demand for foreign currency weakened the taka, which depreciated by more than Tk 1 against the US dollar during the month. The exchange rate stood at Tk 124.00 on October 30, the last working day of the month, compared with Tk 122.92 on October 1, according to Bangladesh Bank (BB) data.

A senior central bank official said import bills for fuel oil, gas and electricity reached around $2.5 billion in October, significantly higher than the earlier estimate of $1.5 billion. The increase was largely driven by volatility in global energy prices amid ongoing geopolitical tensions.

Overall import payments through letter of credit (LC) settlements are expected to exceed $7 billion in October, up from $6.32 billion in September and $6.18 billion in August.

The central bank intervened twice in the foreign exchange market during October, selling $142 million to commercial banks through auctions to contain exchange rate volatility.

Market operators expect pressure to ease somewhat in the coming days, supported by the central bank’s interventions and stronger remittance inflows. Remittance receipts typically rise during the first 10 days of each month, a senior treasury official at a public bank said.

The official also stressed the need for the central bank to monitor exchange rates offered by money changers and exchange houses for remittance transactions to prevent market instability.

A treasury official at a leading private commercial bank suggested that the central bank sell dollars from its foreign exchange reserves when necessary to meet market demand. However, the official warned that import payment pressures could persist in the coming months, particularly ahead of Ramadan, when Bangladesh typically imports larger volumes of essential commodities to meet seasonal demand.

The rising cost of energy imports is already reflected in the country’s import payment data. Petroleum product payments through LC settlements increased by more than 26 per cent to $2.93 billion in July-September of FY27, compared with $2.33 billion in the same period a year earlier.

Fuel oil imports also rose by 6.42 per cent to $10.68 billion in FY26, up from $10.03 billion in FY25.

Global energy prices have added to the pressure. Brent crude traded at $112.33 a barrel on October 30, up 1.38 per cent on the day and 9.79 per cent over the month. The benchmark was also 73.43 per cent higher than a year earlier.

Brent had settled at $116.72 a barrel on October 23, its highest closing level since April, amid concerns over potential supply disruptions following Houthi attacks on Saudi energy facilities. Before the Middle East crisis began in late February 2026, the benchmark was trading at around $72 a barrel.

Bangladesh is also facing higher costs for liquefied natural gas (LNG). Some long-term suppliers continue to offer LNG at around $14 per million British thermal units (MMBtu) under pre-war sales and purchase agreements. However, newer long-term contracts are costing more than twice that amount.

Market insiders said prices under the newer contracts have reached around $30 per MMBtu, based on a Japan-Korea Marker (JKM)-linked pricing formula, which is also used in the volatile spot market.

With energy import costs rising and seasonal demand expected to increase, Bangladesh’s foreign exchange market may continue to face pressure in the months ahead.