Dhaka, Bangladesh (BBN)- Bangladesh Taka (BDT) appreciated slightly against the US dollar in the last week mainly due to higher flow of inward remittance ahead of the Eid-ul-Fitr festival.
The US dollar was quoted at BDT 77.60 in the inter-bank foreign exchange (forex) market on Thursday against BDT 77.61 in the previous working day. It was BDT 77.63 on Tuesday.
"The local currency appreciated against the green back due mainly to higher inflow of remittances, the less demand for the US dollars to settle import payments and modest growth of export earnings,” a senior treasury official of a leading commercial bank told BBN in Dhaka.
He also said private sector credit from overseas sources and foreign portfolio investment have also contributed to increase the flow of foreign exchange in the market.
Bangladesh received $195.19 million as remittance between July 1 and July 4 from Bangladeshi nationals working abroad, according to the central bank statistic.
“We expect that the flow of inward remittance may touch nearly $1.40 billion by the end of this month,” a senior official of the Bangladesh Bank (BB) noted.
The remittances from Bangladeshi nationals working abroad were estimated at $1.29 billion in June 2014, up by $70.54 million from the level of the previous month. In May last the remittances stood at $1.21 billion, the BB data showed.
The average daily inter-bank USD/BDT transaction volume was about $ 15.44 million against around $ 55.17 million of the week before.
Most of the banks kept their published foreign exchange rates unchanged last week. The USD/BDT selling rates for importers of major foreign and private banks was at 77.80-78.30, while USD buying rates from exporters were at 76.80-77.30. For noncommercial payments such as Tele Graphic Transfer as donations, wage earners remittance, dollar drafts etc, the average TT buying rate was in the range of 76.80-77.30 while average TT selling rate was at 78.0314 on the last working day.
USD/BDT swap market last week was very much active. The daily average volume of swap transaction was around $ 55.00 million, according to the market operators.
On the other hand, the central bank of Bangladesh has started purchasing the US dollar from the commercial banks for the ongoing fiscal year (FY) 2014-15.
As part of the move, the BB bought $135 million from the commercial banks on Thursday aiming to keep the inter-bank forex market stable through offsetting its increased supply in the market.
“We’ve started purchasing the greenback from the banks directly for the FY 15 to protect the interests of exporters and migrant workers by keeping the exchange rate of the local currency against the US dollar stable,” the central banker explained.
The country's foreign exchange reserve rose to $21.12 billion on Thursday from $20.80 billion of the previous day following the US dollar purchase.
The central bank purchased a record $5.15 billion from the banks in the FY 14 on the same ground, the BB data showed.
The local call money market traded around 6.00 per cent. The central bank supported commercial banks through REPO and Reverse Repo windows. The BB accepted 91-day treasury bills (T-Bill) and 364-day T-Bill. The cutoff yield of 91-day was 6.84 per cent and 364-day was 8.00 per cent. It also accepted 5-Years Govt. Treasury bond at yield of 10.00 per cent.
BBN/SSR/AD-13July14-11:22 am (BST)