Dhaka, Bangladesh (BBN) - The central bank purchased US$196.50 million more through auction from 16 banks in the interbank spot market on Thursday aiming to keep the exchange rate of the US dollar against the local currency stable.
The amount was bought under the Multiple Price Auction method and the cutoff rate was BDT 122.30 per dollar, according to the central bank officials.
The Bangladesh Bank’s (BB)’s latest intervention in the foreign exchange (forex) market came amid a stronger inflow of inward remittances during the first four days of the current month.
The flow of inward remittances grew by nearly 20 per cent to $506 million during February 01-04 this calendar year, up from $422 million in the same period of last year.
“We’re purchasing the US dollars from banks directly to offset the higher inflow of remittances ahead of the upcoming national polls and the Holy Ramadan,” a senior BB said while explaining the latest market situation.
The central banker also said such intervention helps keep the exchange rate of the US dollar against the local currency stable, which in turn encourages both exporters and remitters.
The central bank of Bangladesh has so far bought $4.52 billion from banks directly since July 13 last under the prevailing free-floating exchange rate arrangement, the central bank’s latest data showed.
Such intervention is also contributing to a gradual strengthening of the country’s foreign exchange reserves, according to the central banker.
Meanwhile, Bangladesh’s gross forex reserves rose to $33.24 billion on February 02 this calendar year from $33.18 billion on January 29 last as per traditional calculation of the central bank.
Under the International Monetary Fund (IMF)’s Balance of Payments International Investment Poisson Manual-six edition, generally known as BMP6, the forex reserves stood at $28.75 billion during the period under review from $28.68 billion.
BBN/SSR/AD