BBN file photo

Dhaka, Bangladesh (BBN)– The central bank of Bangladesh injected US$1.66 billion so far this fiscal year into the market, but the local currency keeps losing its value against US dollar.

As part of the step, the Bangladesh Bank (BB) is providing such foreign exchange support to help banks foot import payment bills, particularly for oil, capital machinery for power plants, liquefied natural gas (LNG) and fertiliser.

Since July of the current fiscal year, the central bank has sold $1.66 billion to the commercial banks as part of its ongoing support, according to latest official figures.

The value of local currency against the US dollar keeps falling, despite the central bank’s continued foreign currency support according to the market operators.

The Bangladesh Taka (BDT) depreciated by 20 poisha against the greenback in the inter-bank foreign exchange market from January 03 to February 26, mainly due to higher demand for the greenback, they added.

The US dollar was quoted at BDT 84.15 each in the inter-bank foreign exchange market on February 25 against BDT 84.12 of the previous working day. It was BDT 83.90 on January 02.

It also remained unchanged at BDT 84.15 on Wednesday.

Talking to the BBN, a senior official of the Bangladesh Bank (BB) said raising the allocation of Export Development Fund (EDF) scheme will help increase the inflow of foreign currency in the local market.

The central bank has already increased the allocation of EDF scheme by US$500 million to $3.50 billion from $3.0 billion earlier.

“Such enhancement of the EDF scheme will also help minimize the mismatch between demand and supply of the foreign exchange in the market,” the central banker explained.

He also said the central bank may continue providing such foreign currency support to the banks in line with the market requirements.

The demand for the US currency to ease gradually after the higher inflow of inward remittances along with export income in the coming months, the BB official added.

Bangladesh’s forex reserves rose to $32. 23 billion on Wednesday from $ 32.16 billion of the previous working day despite selling of the US dollar to the banks.

Echoing the central banker, a senior treasury official of a leading private commercial bank said that the enhancement of EDF scheme would help boost liquidity in the market.

“The demand for the greenback may ease in the coming months if the existing import payment pressure on the economy continues,” the treasury official added.