Dhaka, Bangladesh (BBN)- The central bank of Bangladesh purchased $45 million on Tuesday from three commercial banks aiming to keep the inter-bank foreign exchange market stable, officials said.
The central bank has intervened in the market to protect the interest of exporters and remitters through keeping stable exchange rate of the local currency against the US dollar, they said, adding that stable local currency exchange rate is essential for keeping the growth of inflow remittances and export earnings continue.
“The central bank has bought the US dollar from banks at market rate to keep the exchange rate of local currency stable against the greenback,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
The US dollar was quoted at BDT 81.83 –BDT 81.87 in the inter-bank foreign exchange market on the day against BDT 81.73-BDT 81.83 of the previous working day.
“We may continue our intervention in line with the market requirement,” he said, adding that the central bank is monitoring the country’s overall forex market closely.
The country’s foreign exchange reserve rose to $10.12 million Tuesday following the purchase of the US dollar for the banks from $10.059 billion of the previous day.
The central bank has gradually reduced its intervention in the country's foreign exchange market in the current fiscal (FY) year (2011-12), following improvement in foreign exchange supply situation, officials said.
Only US$70 million was bought from different banks so far this fiscal, as part of the market intervention, while the central bank pumped $781 million directly to the commercial banks to meet higher demand for the greenback in the fiscal, according to the statistics.
"Lower import payment pressure, steady growth of inward remittance, and rising trend of export proceeds have contributed to improve supply of foreign exchange in the market," the central banker said.
He also said the central bank has provided the foreign currency support through selling the US dollar to the commercial banks to settle payment of import bills on account of essential items including fuel oil, wheat, fertilizer and scrap vessel.
In the FY’11, the central bank bought $316.50 million directly from the commercial banks, against $2.161 billion of the previous fiscal. On the other hand, the BB sold $1.279 billion directly to the commercial banks in 2010-11, compared to only $61.50 million in the previous fiscal, the BB data showed.
BBN/SSR/AD-26June12-8:40 pm (BST)
