Dhaka, Bangladesh (BBN) - The central bank on Monday purchased US$30 million from a bank through an auction in the interbank spot market aiming to keep the exchange rate of the US dollar against the Bangladesh Taka stable.
The amount was bought under the Multiple Price Auction method, with a cut-off rate of BDT 122.75 per dollar, according to officials of Bangladesh Bank (BB).
The latest intervention in the foreign exchange market comes amid a surge in inward remittances at the start of the month. Remittance inflows jumped nearly 258 per cent to $315 million during May 01–03, up from $88 million in the same period last year.
“We’ve purchased US dollars to keep the exchange rate stable by offsetting higher remittance inflows ahead of Eid-ul-Azha,” a senior BB official said, explaining the market move.
He added that stronger export earnings, particularly in April, have also boosted foreign currency inflows in the market.
Since July 13 last year, the central bank has bought $5.64 billion from banks under the prevailing free-floating exchange rate regime, according to the latest data. Such interventions are also helping gradually strengthen the country’s foreign exchange reserves.
Meanwhile, Bangladesh’s gross forex reserves rose to $35.29 billion on May 04 from $35.12 billion on April 23, based on the central bank’s traditional calculation.
Under the IMF’s Balance of Payments and International Investment Position Manual (BPM6), reserves stood at $30.60 billion, up from $30.48 billion over the same period.
BBN/SSR/AD