Cen bank’s dollar purchase crosses $1.7b

Business Report :

The Bangladesh Bank has purchased $1.7 billion from banks over the past two months, including $353 million on Monday in an effort to stabilize the exchange rate and support remittance and export flows.

Bangladesh Bank has purchased this amount so far since it began buying dollars through auctions on 13 July.

In the mid of July, the exchange rate of the American greenback continued to fall against the local currency.

To tackle the sharp fall, the banking regulator on July 13 bought $171 million from 18 commercial banks through an auction – the first such move under the floating rate system.

“On September 15, $353 million has been bought from more than 10 banks with exchange rates ranging between Tk121 and Tk121.75 under the Multiple Price Auction method,” a senior official of Bangladesh Bank told the media.

Earlier, on 9 September, Bangladesh Bank purchased $265 million from commercial banks through another auction with a cut-off rate of Tk121.70.

A deputy managing director of a leading private bank said a year of strong remittance and export inflows has allowed banks to clear long-standing overdue import bills, particularly for fuel.

With those payments settled and import pressure easing, the supply of dollars is now exceeding demand, pushing the rate down, the banker added.

Economists, however, criticized the central bank’s move amid high inflation in Bangladesh, arguing that allowing the dollar rate to drop further could help contain inflation.