Bangladesh Bank Ensures Dollar Market Stability

Bangladesh Bank (BB) on Wednesday intervened in the interbank foreign exchange market to maintain stability in the US dollar rate, purchasing an additional USD 109 million in collaboration with eight commercial banks. The move is part of a broader strategy to manage ongoing currency market volatility amid rising remittance inflows.

According to sources within the commercial banking sector, the transaction was conducted using a Multiple Price Auction (MPA) system, with a cut-off rate set at BDT 122.30 per dollar. Central bank officials emphasised that such interventions are routine measures aimed at moderating fluctuations in the foreign exchange market. They noted that these actions are particularly significant when heightened remittance flows exert upward pressure on the market.

Data for the first 17 days of February indicate that remittance inflows have surged by 24.7% compared to the same period last year, reaching USD 1.97 billion, up from USD 1.58 billion in 2025. Under the floating exchange rate regime introduced on 13 July 2025, Bangladesh Bank has purchased a total of USD 5.15 billion from commercial banks, ensuring ample liquidity in the market.

A senior official commented, “The pre-Ramadan surge in remittance flows can place upward pressure on the dollar rate. Our dollar purchases help maintain exchange rate stability, benefiting both remitters and exporters.” He added that these interventions are gradually strengthening the country’s foreign exchange reserves. As of 17 February, total reserves stood at USD 34.54 billion, up from USD 34.32 billion on 10 February. Measured according to the International Monetary Fund’s (IMF) Balance of Payments and International Investment Position Manual (Sixth Edition), reserves increased to USD 29.86 billion, compared with USD 28.69 billion previously.

The key foreign exchange market and reserve indicators are summarised in the table below:

Central bank authorities have indicated that interventions will continue through Ramadan to ensure sufficient liquidity in the foreign exchange market and preserve overall economic stability.

Market analysts have described this sustained support as a positive signal for remitters and exporters, reinforcing confidence in Bangladesh’s economic resilience.