Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has resumed its foreign exchange support through selling the US dollar to the commercial banks after a month interval aiming to keep the market stable, officials said.
As part of the move, the Bangladesh Bank (BB), the country’s central bank, sold US$ 20 million at market rate to two commercial banks directly Thursday to meet the growing demand for the greenback.
“The central bank has provided the US dollar to the banks for making their import payments for petroleum products imports payment bills,” a BB senior official told BBN in Dhaka.
Earlier on July 25 last, the BB also sold same amount of the US currency to a leading state-owned commercial bank for making payment of their food grains import payments bills, he added.
“We may continue such support to the banks in line with the market requirement,” the central banker hinted.
In May last, the central bank sold $21 million to the banks, the BB data showed.
The BB’s latest move came against the backdrop of depreciating trend of the Bangladesh Taka (BDT) against the US dollar in both the inter-bank foreign exchange market and customer level in the recent days.
The US dollar was quoted at BDT 80.65-BDT 80.66 in the inter-bank foreign exchange market on the day against BDT 80.64 on July 26 last, according to the market operators.
On the other hand, the exchange rate of greenback for BC (bills for collection) selling rose to BDT 81.7338 on Sunday from BDT 81.7326 of the previous working day.
It was BDT 81.7062 on July 26 last, according to the statistics of the Bangladesh Foreign Exchange Dealers Association (BAFEDA).
Market insiders said some banks are now holding sufficient amount of the greenback as the central bank raised substantially the net open position (NOP) limit of the banks in last year.
The NOP has been increased by more than 45 per cent to US$ 2.19 billion from $1.51billion earlier of all 56 scheduled banks.
It was determined on the basis of 20 per cent of the total regulatory capital of the banks as on March 31, 2016, according to the BB officials.
Talking to BBN, a senior treasury official of a leading private commercial bank said the banks believe that the exchange rate of BDT against the US dollar depreciate further in the near future for making import payment bills of different commodities particularly for food grains.
He also said the import of food grains may increase substantially in the coming months to meet the growing demand for the essential in the domestic market.
However, a section of banks have already lent the US dollar to their OBUs (Offshore Banking Units) from NOP, another treasury official alleged.