Dhaka, Bangladesh (BBN) – The central bank has intensified further the buying of US dollar from banks to keep the inter-bank foreign exchange market stable ahead of the Eid-ul-Fitr festival, officials said.
Under the latest move, the Bangladesh Bank (BB) bought US$90 million from eight commercial banks on Monday directly to protect the interests of exporters and migrant workers by keeping the exchange rate of local currency against the greenback stable.
The US dollar was quoted at BDT 78.40 in the inter-bank forex market, marking no change in the price level, market operators said.
On Thursday last, the central bank also purchased $25 million from banks on the same ground.
“We’ve strengthened purchase of the US dollar from the banks to maintain a balance between supply and demand as inflow of the foreign currency has already started to rise ahead of the Eid,” a BB senior official explained.
He also said the supply side of the foreign currency is improving gradually following higher export earnings along with rising trend of inward remittances.
Bangladesh received $1.13 billion as remittances between June 1 and June 24 from Bangladeshi nationals living and working abroad, according to the central banker.
The BB official also expressed the hope that the inflow of remittances might exceed $ 1.40 billion by the end of this month if the existing trend of inward remittances continues.
A total of $3.88 billion was bought from the commercial banks between July 02 and June 27 of the ongoing fiscal year (FY) 2015-16 for offsetting its increased supply in the market, the BB data showed.
“Such purchase also helps the banks to comply with the net open position (NOP) rules for holding foreign exchange properly,” another BB official explained.
The central bank may continue buying the US dollar from the banks in line with the market requirement, he hinted.
Country’s foreign exchange reserve rose to $30.001 billion on Monday from $29.86 billion on the previous day following US dollar purchase.
The central bank of Bangladesh bought $3.76 billion from the commercial banks in the last FY. It bought $5.15 billion and $4.54 billion in FY 14 and FY 13 respectively.