BB Buys $313m to Stabilise Falling Dollar Rate

Representational photo

Bangladesh Bank (BB) purchased another $313 million from 22 commercial banks on Tuesday to stabilise the exchange rate after a sharp fall in the US dollar’s value against the local currency.

The auction was held at a cut-off rate of Tk 121.5 per dollar, a senior BB official confirmed, requesting anonymity. The purchased dollars will be added to the central bank’s foreign exchange reserves.

As of 10 July, Bangladesh’s forex reserves stood at $24.54 billion under the IMF’s BPM6 method—up from $21.06 billion a year earlier.

Due to the central bank’s intervention, the interbank dollar selling rate rose to Tk 121.5 on Tuesday, up from Tk 120.1 the previous day. Over the past week, the greenback had been depreciating steadily against the taka.

To address the sharp fall, Bangladesh Bank previously bought $171 million from 18 banks on 13 July—the first such intervention under the floating exchange rate regime.

Explaining the move, BB Executive Director and Spokesperson Areif Hussain Khan said the intervention aimed to prevent excessive volatility in the forex market.

“We want to keep the market stable, as both sharp rises and falls in the dollar rate are harmful. If the dollar weakens too much, exporters and remitters face losses,” he told The Daily Star.

However, Dr Zahid Hussain, former lead economist of the World Bank’s Dhaka office, criticised the move. He argued that allowing the dollar rate to fall further could help ease inflationary pressures.

“Bringing the rate down to around Tk 110 could have made a significant difference in controlling inflation. So why is this opportunity to curb inflation being missed?” he questioned.

The central bank, however, remains focused on stabilising the market and supporting exporters and remittance earners amid ongoing economic challenges.