Dhaka, Bangladesh (BBN)– Bangladesh taka (BDT) depreciated marginally by 0.10 per cent against the US dollar over the last two weeks following a rise in demand for the greenback in the market.
The US dollar was quoted at BDT 69.10-BDT 69.13 in the inter-bank foreign exchange market Monday against BDT 69.10-BDT 69.11 of the previous working day, officials said.
On October 06 last, the US dollar was quoted at BDT 69.06 –BDT 69.07 in the inter-bank foreign exchange market against BDT 69.06 on the previous working day.
“The rate of US dollar has been revised in line with the market demand,” a senior official of the Bangladesh Bank (BB) said, adding that the central bank is monitoring the overall market situation closely.
The BB official also said the central bank continues its intervention in the inter-bank foreign exchange market by selling and buying US dollar directly from the banks to keep the market stable.
As part of the intervention, the BB sold $20 million to a state-run commercial bank Monday to meet their growing demand for the greenback to settle import payment bills, the BB officials said.
The depreciation of BDT started since October 5 last following the increase in demand for greenback in the inter-bank foreign exchange market to settle import payment bills for scrap vessels, wheat, fertilizer, and edible oil and fuel oil, market operators said.
Besides, lifting of restriction on forward dealing of foreign exchange by the central bank has also pushed the demand of the US dollar in the market, they added.
On October 4 last, the BB relaxed a regulation and allowed commercial banks to engage in forward dealing of foreign exchange freely to add an impetus to the country’s foreign exchange market activities.
Under the relaxation, the commercial banks have been permitted to deal with forward trade in foreign exchange without any restriction.
The central bank earlier on January 4, 2005 imposed a restriction on forward sales to minimize pressure on the country’s inter-bank foreign exchange market, according to BB officials.
The restriction required the dealer banks to cover at least 50 per cent of their forward sales by forward purchase with the rest covered by inter-bank buy-deals and purchases against export bills.
However, the central bank started intervention in the market by selling the US currency directly to the authorized dealer banks from October 8 last.
The BB has since sold $31 million to the commercial banks as part of its intervention in the market, according to the central bank statistics.
“The local currency is likely to devalue slightly against the US dollar to settle import payments bills,” a senior treasury official of a commercial bank told BBN without elaborating.
BBN/SS/SI/AD-20October09-12:09 am (BST)