Dhaka, Bangladesh (BBN) - The Bangladesh Bank (BB) purchased an additional US$109 million through auction from eight banks in the interbank spot market on Wednesday to help stabilise the exchange rate of the US dollar against the local currency.
The amount was bought under the Multiple Price Auction method, with a cut-off rate of BDT 122.30 per dollar, according to central bank officials.
The central bank’s latest intervention in the foreign exchange (forex) market came amid a stronger inflow of inward remittances during the first 17 days of the current month. Remittance inflows rose by nearly 25 per cent to $1.97 billion between February 1 and 17 this year, compared with $1.58 billion in the same period last year.
Under the prevailing free-floating exchange rate regime, the central bank has so far purchased $5.15 billion directly from banks since July 13 last year, official data showed.
“We’re purchasing US dollars from banks directly to offset the higher inflow of remittances ahead of the Holy Ramadan,” a senior BB official said, explaining the latest market situation.
Such intervention helps keep the exchange rate of the US dollar against the taka stable, which in turn encourages both exporters and remitters, the official added. “The ongoing intervention is also contributing to a gradual strengthening of the country’s foreign exchange reserves.”
Meanwhile, Bangladesh’s gross forex reserves rose to $34.54 billion on February 17 this year from $34.32 billion a week earlier, based on the central bank’s traditional calculation.
Under the International Monetary Fund’s Balance of Payments and International Investment Position Manual, sixth edition (BPM6), the country’s reserves stood at $29.86 billion during the same period, up from $28.69 billion.
BBN/SSR/AD