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-Azha, officials said.
Under the latest move, the Bangladesh Bank (BB) bought US$145 million from three commercial banks on Wednesday 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 Tuesday last, the central bank also purchased $45 million from three 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 senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
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 nearly $941 million in remittance during the first 26 days of this month from Bangladeshi nationals living and working abroad, according to the central banker.
He expects the flow of inward remittances to cross $1.30 billion by the end of this month.
In July, the country received more than $1.0 billion as remittances.
Talking to BBN, another BB official said such purchase also helps the banks to comply with the net open position (NOP) rules for holding foreign exchange properly.
He also said the BB may continue buying the US dollar from the banks in line with the market requirements.
“We’re compelled to sell our excess foreign exchange to the BB despite enhancement of the NOP limit in the last month,” a senior treasury official of a private commercial bank told BBN in Dhaka.
Earlier on July 28, the central bank increased the NOP limit more than 11 per cent to $1.51 billion from $1.36 billion earlier for all the banks to manage the foreign-exchange market.
“The inflow of the US currency is improving gradually following lower import-payment obligation because of falling trend in commodity prices, including that of fuel oils, on the global market,” the private banker explained.
A total of $951 million was bought from the commercial banks between July 11 and August 31 of the current fiscal year (FY) 2016-17 for offsetting the impact of its increased supply to the market, the BB data showed.
The country’s forex reserves reached $31.16 billion on Wednesday from $30.98 billion on the previous day following the purchase of US dollar.
The central bank of Bangladesh bought $4.13 billion from the commercial banks in the last FY. It bought $3.76 billion and $5.15 billion in FY 15 and FY 14 respectively.