Bangladesh Bank has stepped into the foreign exchange market to purchase 50 million US dollars from commercial banks via auction, breaking a hiatus of nearly three and a half months. The intervention, carried out on Tuesday afternoon, follows a noticeable surge in buck supply that had begun pushing down the value of the greenback.
The central bank last bought dollars from the commercial banking sector on 20 May. Confirming the latest market intervention, Bangladesh Bank spokesman Arif Hossain Khan noted that the operation aimed to address prevailing liquidity dynamics.
Market insiders revealed that the greenback opened on a weak note on Tuesday morning. Commercial banks were initially acquiring remittance dollars from overseas exchange houses at rates between Tk 122.30 and Tk 122.40 per dollar. Meanwhile, settlement rates for import liabilities, or letters of credit (LCs), were ranging from Tk 122.50 to Tk 122.60.
The dynamic shifted significantly around midday when Bangladesh Bank announced it would buy dollars at a fixed rate of Tk 122.75. This intervention immediately stabilized the market. By late afternoon, several commercial banks aligned their operations with the central bank’s benchmark, settling both remittance inflows and import LCs at the Tk 122.75 threshold.
Industry sources highlighted an unusual timing in the central bank’s communication. Bangladesh Bank informed commercial lenders of the purchase around 1:00 pm. Typically, such operational directives are issued in the morning. As a consequence of the standard early-morning trading, several banks had already cleared import liabilities for business clients at relatively lower rates earlier in the day.
This central bank intervention comes against the backdrop of heightened volatility in the local foreign exchange market over the past fortnight. Just two weeks ago, exchange rates dipped to Tk 122 per dollar, only to rally sharply to Tk 123.65 towards the end of last week. A fluctuation of nearly one and a half Taka within such a brief window has heightened uncertainty among bankers, importers, and corporate clients alike. To mitigate currency risk amidst this instability, an increasing number of market participants are now seeking forward booking options to secure future dollar requirements.
