Dhaka, Bangladesh (BBN)- Bangladesh Taka (BDT) depreciated by 0.58 percent against the US dollar in a single day on Sunday following increased demand for the greenback to settle import payments by the commercial banks, treasury officials said.
The rate of US dollar in the inter-bank foreign exchange market jumped to a maximum of BDT 72.40 on the day on heavy buying pressure from the commercial banks, they added.
The US dollar was quoted at BDT 71.99 –BDT 72.40 in the inter-bank foreign exchange market on the day against BDT 71.94- BDT 71.98 of the previous working day, according to the central bank statistics.
"The market forces have pushed up the inter-bank US$/BDT rates," a senior official of the Bangladesh Bank (BB), the country’s central bank said, adding that the BB is monitoring the overall foreign exchange market closely.
"The central bank will intervene in the market if it behaves irrationally," the BB official said, adding that such inter-bank rate of the greenback will discourage third currency, popularly known as cross currencies.
He also said the hike in inter-bank rate of US dollar will also help bring an equilibrium position between the bills for collection (BC) and the inter-bank rates.
The US dollar was quoted at maximum BDT 73.50 for BC sold on Sunday. The rate remained unchanged from the previous level, according to the Bangladesh Foreign Exchange Dealers Association (BAFEDA) statistics.
"It's a massive depreciation of the BDT against the greenback in a single day after introducing floating exchange rate (FER) in 2003," a senior treasury official of a commercial bank said.
The country's growing export earnings will be helped by this depreciation when the interest rates are expected to increase further in the coming days, another treasury official of a commercial bank said.
"Though the cost of doing business would go up, the export sectors will be happy," he said, adding that the non-resident Bangladeshis, facing challenges in the Middle East countries, would be encouraged to remit their earnings using banking channel.
BBN/SSR/AD-21Mar11-8:59 am (BST)