Dhaka, Bangladesh (BBN) – The central bank of Bangladesh on Thursday provided the overdraft (OD) facility for US$30 million more to a state-owned commercial bank (SCB) for settlement of fuel oil import bills.

“We’ve provided the SCB with such a facility against the government-approved securities aiming to keep both money and foreign exchange markets stable,’ a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in the capital, Dhaka.

On Monday last, the BB offered such a short-term foreign currency facility for $25 million to another SCB to settle fertilizer import bills.

The central bank will continue the move to provide such support to commercial banks mainly for making payments for import of essential items, including petroleum products, food grains and fertilizer, according to the official.

Under the move, the BB provided the OD facility for $41 million in the last week to help at least two SCBs clear petroleum import bills, officials confirmed.

The central bank of Bangladesh continues its intervention in the inter-bank foreign exchange market by selling and buying US dollars directly and providing such facilities to commercial banks to keep the market stable.

As part of the intervention, the central bank bought $9.50 million from the commercial banks recently.

On the other hand, the BB has started intervening in the market by selling the US currency directly to the commercial banks since October 29, 2007 to keep the market steady.

The central bank has since sold $735 million to the commercial banks as part of its intervention in the market, they added.

BBN/SI/SI/AD-15 August08-1:10 AM