Dhaka, Bangladesh (BBN) - Bangladesh’s gross foreign exchange reserves crossed the $35 billion mark on Tuesday for the first time in more than three years, as the central bank continued purchasing US dollars from banks to offset higher remittance inflows ahead of the Eid-ul-Fitr festival.
The reserves rose to $35.04 billion from $34.86 billion a day earlier, according to the central bank’s traditional calculation method. The reserves were last above this level in October 2022, when they stood at $35.80 billion.
However, under the International Monetary Fund’s Balance of Payments and International Investment Position Manual (sixth edition), commonly known as BPM6, the reserves stood at $30.30 billion during the review period, up from $30.11 billion previously.
Officials said Bangladesh Bank is now working to raise reserves to $36.50 billion after settling the Asian Clearing Union (ACU) payment obligation. At that level, the country would be able to cover six months of import payments, meeting the global benchmark.
Over the past seven months, the central bank has purchased nearly $5.50 billion from banks to maintain exchange rate stability and encourage exporters and remitters.
As part of the ongoing intervention, it bought an additional $87 million from eight banks through a Multiple Price Auction in the interbank spot market on Tuesday. The cut-off rate was set at BDT 122.30 per dollar, officials said.
Earlier, on February 22, the central bank purchased $123 million from eight banks in a similar auction. Since July 13 last year, Bangladesh Bank has bought a total of $5.47 billion directly from banks under the prevailing free-floating exchange rate regime.
Officials noted that the central bank’s dollar purchases are aimed at absorbing excess foreign currency liquidity stemming from higher remittance inflows ahead of Eid.
Inward remittances rose by nearly 24 per cent to $2.57 billion during February 1–23 this year, compared to $2.08 billion in the same period last year.
Market operators said the interventions have helped stabilise the dollar-taka exchange rate, thereby encouraging both exporters and remitters. They also noted that the ongoing measures are contributing to a gradual strengthening of the country’s foreign exchange reserves.
Meanwhile, yields on long-term treasury bonds declined on Tuesday, as banks opted to invest surplus liquidity in government securities amid weak private sector credit demand.
The cut-off yield on 15-year Bangladesh Government Treasury Bonds (BGTBs) fell to 10.34 per cent from 10.55 per cent, while the yield on 20-year BGTBs dropped to 10.44 per cent from 10.67 per cent, according to auction results.
The government raised BDT 20 billion through the issuance of BGTBs to partially finance its budget deficit.
“Most banks are eager to invest their excess liquidity in government securities, as private sector credit demand remains subdued amid uncertainty following the just-concluded national election,” a Bangladesh Bank official said.
Private sector credit growth slowed to 6.10 per cent year-on-year in December 2025, down from 6.58 per cent a month earlier, according to the latest central bank data.
Market participants said the central bank’s dollar purchases injected liquidity into the banking system in the form of taka, which in turn exerted downward pressure on bond yields.
Currently, five government bonds — with tenures of two, five, 10, 15 and 20 years — are traded in the market.
In addition, four treasury bills (T-bills) with maturities of 14 days, 91 days, 182 days and 364 days are auctioned to manage the government’s short-term borrowing from the banking system.
BBN/SSR/AD