In the wake of currencies losing their value worldwide, Bangladesh’s central bank bought up US dollars worth 3.76 billion from the commercial banks directly in the just-concluded fiscal year to keep the country’s money market stable.
However, official figures show the amount purchased in FY 2014-15 as lower in volume than what were in the previous two consecutive fiscal years, reports The Financial Express (FE).
In FY14 and FY13, the Bangladesh Bank (BB) had bought $5.15 billion and $4.54 billion respectively.
On the other hand, the central bank sold only $357 million to the banks in the past fiscal to meet demand for the greenback on the market, according to the central bank’s latest statistics.
The governing bank, however, did not sell any single dollar on the market in the two previous fiscal years, according to the BB data.
“We’re maintaining a market-based exchange-rate policy continuously to avoid excessive volatility,” a BB senior official told the FE in explaining the main objective of intervention in the market.
He also said the BB purchases the greenback from the banks continuously to protect the interests of exporters and migrant workers by keeping the exchange rate of the Bangladesh Taka (BDT) against the US dollar stable.
As part of the move, the central bank bought $35 million at market rate from a commercial bank Thursday, according to the central banker.
The dollar was quoted at Tk 77.80 on the inter-bank forex market, unchanged from the previous level, market operators said.
The country’s forex reserves reached $25.03 billion Thursday from $25.02 billion of the previous day, following the US dollar purchase.
Talking to the FE, a senior treasury official of a leading private commercial bank said lower import-payment pressure and steady growth of both export earnings and the flow of inward remittance contributed to the improvement in supply of foreign exchanges on the market recently.
“Most commercial banks are now holding ‘sufficient’ amount of the US dollar due mainly to lower prices of essential commodities, including fuel oil, on the global market,” he noted.
Petroleum imports dropped 17.75 per cent to $2.94 billion during the July-April period of the FY15 from $3.58 billion of the same period of the previous fiscal.
“The demand for the US currency will increase when the imports will be picking up,” the private banker hinted about the state of the US currency.