Dhaka, Bangladesh (BBN) - The central bank has purchased more than US$4.0 billion from banks over the past nearly seven months to encourage both exporters and remitters by keeping the dollar-taka exchange rate stable.
As part of its ongoing intervention, the Bangladesh Bank (BB) bought $218.50 million through auction from 16 commercial banks in the interbank spot market on Monday for the same purpose.
The latest amount was purchased under the Multiple Price Auction method, with the cut-off rate set at BDT 122.30 per dollar, according to officials.
Earlier, on January 29, the central bank bought $55 million from five banks in a similar auction.
Under the prevailing free-floating exchange rate arrangement, the country’s banking regulator has so far purchased US$4.15 billion directly from banks since July 13 last.
“We are purchasing US dollars from banks to keep the exchange rate stable, which facilitates export earnings as well as the flow of inward remittances,” a senior central banker said while replying to a query.
He also said such intervention in the foreign exchange (forex) market is helping strengthen the country’s foreign exchange reserve position.
Meanwhile, Bangladesh’s gross forex reserves rose to $33.18 billion on January 29 this year from $32.62 billion on January 15, according to the central bank’s traditional calculation.
Under the International Monetary Fund’s Balance of Payments and International Investment Position Manual, sixth edition (BPM6), the forex reserves stood at $28.68 billion during the period under review, up from $28.03 billion, according to the central bank’s latest statistics.
BBN/SSR/AD