Forex market getting bullish by the day  

The dollar appreciated against the taka in the already bullish foreign exchange market following the large payment for the Padma bridge that squeezed the supply of greenbacks.

Demand for dollars rose further in the interbank forex market yesterday after $110 million was paid in advance to the successful bidders for the construction of the bridge.

The reserves now stand at $19.04bn, enough to pay off six months’ imports and second highest among SAARC countries
The reserves now stand at $19.04bn, enough to pay off six months’ imports and second highest among SAARC countries

The central bank yesterday sold around $88 million in the interbank forex market, the highest in the last two weeks.

After a gap of two and a half years, Bangladesh Bank on November 24 started selling greenbacks, and has so far sold $228 million to banks.

The exchange rate is creeping up in the interbank market almost every day. The dollar traded at Tk 77.8 yesterday, up from Tk 77.69 on November 30.

Biswajit Saha, general manager of City Group of Industries, said the foreign currency shortage in banks has pushed up their import costs.

The company earlier opened letters of credit at Tk 77.60 for a dollar for a deferred payment facility. But now, it has to make payments at a higher greenback price.

“There is a shortage of dollars in the market and no uniformity in the currency rates in banks,” he said, adding that the firm made payments on Wednesday by purchasing the dollar at Tk 79.05.

Saha expects the prices of cooking oil, sugar and other import-dependent commodities to rise for increased costs of imports. “This may even stroke food inflation.”

Kazi Saidur Rahman, a general manager of BB, said the demand for dollars increased in recent times as investment picked up.

Other than capital machinery and raw material imports, the import of fertilisers, petroleum and edible oil also increased, he said.

Fearing a further rise in the dollar rate, many importers are now rushing to make their deferred payments, Rahman said.

The average foreign currency transaction in the first five months of the fiscal year stood at $551 million, up from the average of $453 million last fiscal year. In fiscal 2012-13, the average transaction stood at $421 million.

During the July-October period, LC openings for food grain imports accelerated around 30 percent, industrial raw materials 13 percent and other products 23 percent.

Though the demand for dollars has increased, the country’s foreign currency reserve is satisfactory. It stood at $21.68 billion yesterday.

-The Daily Star