Dollar purchase spree goes in vain

The dollar again started to depreciate against the taka from February 26 this year, after a steady run in the previous nine months, despite the fact that Bangladesh Bank in a frantic effort to keep the price of the dollar stable purchased greenbacks worth $3.63 billion from the local banks in this fiscal year.

bbThe BB data showed that the dollar depreciated frequently in the month of March as it was quoted at Tk 77.68 to Tk 77.70 on March 20 while it was quoted Tk 77.75 to Tk 77.75 on February 26 this year, reports the New Age..

A BB official told New Age on Thursday that any further depreciation of the dollar would put a negative impact on the country’s export sector and the inward inflow of remittance.

The dollar price had risen to Tk 84.45 on January 29, 2012. From January 29, 2012 to May 30, 2013, the price of dollar against the taka continuously had declined.

After the period the BB was able to keep the dollar price stable as it had purchased huge amount of greenbacks, the BB official said.

He said, ‘A number of scheduled banks are now keeping excess greenback as the country posted a robust export growth in the first eight months of this year.’

For this reason, the BB purchased $3.63 billion from the local banks from July 1 to March 19 of this financial year in bid to tackle the dollar deprecation against the taka, he said.

The official said the BB bought greenbacks worth $30 million on March 19 from the commercial banks at market rate to offset the increased supply of foreign exchange in the market.

The central bank purchased greenbacks worth $327 million in just 19 days of this month.

The BB purchased greenbacks worth $652 million in February, $295 million in January, $256 million in December, $445 million in November, $585 million in October, $529 million in September, $226 million in August and $512 million in July of the FY14.

The BB data showed that the central bank had purchased greenbacks worth $4.53 billion in the FY 2012-13.

After the BB had bought a huge amount of dollar last fiscal year, the taka remained stable at around 77.75 a dollar between May, 2013 and February 2014.

Following the fresh dollar purchase this fiscal year, the country’s foreign exchange reserve rose to a record $19-billion mark on February 19 for the first time.

Another BB official said the huge amount of foreign exchange reserve remained idle as the investment sector was still passing a stagnant situation.

The foreign exchange reserve will increase more in the months to come if imports do not increase in accordance with the demand from the industrial sector, he said.

As per the international standards, a country should have enough foreign exchange reserve to clear import bills for three months.

Bangladesh will be able to meet import bills for six months by using the $19 billion foreign exchange reserve.

The country has been enjoying comfortable foreign exchange reserve since the beginning of the FY13 as imports declined significantly amid political unrest.

Under the circumstances, the BB had started to intervene in the foreign currency market after the Bangladeshi currency had increased to Tk 84 a dollar in January of 2012 from around Tk 71 in the previous year, he said.