BB provides $2bn forex support
Bangladesh Bank has provided more than $2 billion support to the commercial banks in an effort to stabilise the foreign exchange market.
The move to sell greenback has been taken to make payment of imported goods coming in greater number.
The central bank has sold a total of $2.04 billion to the banks since July 1, 2017 in this fiscal year, while BB gave only $175 million in the last fiscal year, according to BB latest data.
Taking to Bangladesh Post, a senior official of BB, said the central bank has continued its foreign currency support to the banks to meet higher import payment obligations, including for food grains, fuel and capital machinery.
The central bank might maintain its support to the banks as required by the market, he hinted.
On Tuesday, the US dollar has appreciated by Tk 0.50 to Tk 83.60 against the local currency.
As part of the move, the BB sold $24 million to seven commercial banks the same day to meet growing demand for the greenback to keep the market stable.
A senior banker said the central bank provides constant support to stabilise the market.
He said the depreciation of local currency against US dollar since the 2016-2017 fiscal has been a matter of concern for the central bank and the government.
In span of one year, the local currency depreciated by more than Tk 3 or almost 4 percent to Tk 83.60 against US dollar.
However, the US dollar appreciated in every month in the current fiscal year, except for March, by 6 paisa in July to Tk 80.66, 2 paisa to Tk 80.70 in August, 10 paisa to 80.80 in September, 20 paisa to Tk 80.90 in October, Tk 1.40 to Tk 82.30 in November, 40 paisa to Tk 82.70 in December, 20 paisa to Tk 82.90 in January, 6 paisa to Tk 82.96 in February, 2 paisa in April and 62 paisa in May, according to a BB data.
Adel Haque, former joint director of the central bank, told Bangladesh Post that the central bank have provided very good supports to stabilise the foreign exchange market.
He said the demand for the US dollar is gradually increasing, mainly due to higher import payment pressure, particularly for capital machinery, petroleum products and food items.
Bangladesh’s earnings have recently risen significantly including remittance and export earnings which are good news for the country, he added.
Eminent economist and former BB governor Dr Salehuddin Ahmed told Bangladesh Post that Bangladesh has sufficient foreign exchange reserves right now.
He mentioned the reserves mainly increased due to steady growth of remittance side by side higher export earnings.
The government should encourage traders to reduce unnecessary imports to absorb the growing trade imbalance side by side the current account deficit for the time being, he said, adding that it will help to stabilise the market by increasing dollar supply.