Central Bank Buys $700m in Early January Auctions Moves

Representational image

Bangladesh Bank purchased $700 million from commercial banks through auctions during the first 12 days of January, continuing its intervention in the foreign exchange market to stabilise dollar supply and demand.

The development was confirmed on Sunday by the central bank’s spokesperson and Executive Director Arief Hossain Khan.

On the day, Bangladesh Bank bought $81 million from 10 commercial banks at an exchange rate of Tk122.30 per dollar. With this latest transaction, the central bank’s total dollar purchases from commercial banks in the current fiscal year have reached $3.83 billion.

Bangladesh Bank began buying dollars through auction mechanisms in July last year as part of a shift towards a market-based exchange rate system. Under this framework, the central bank aims to maintain balance in the foreign exchange market by allowing the dollar price to ease when supply is higher and permitting it to rise when demand strengthens.

Bankers said demand for dollars has eased in recent weeks due to several factors. Government foreign payment obligations have declined, reducing pressure on the foreign exchange market. At the same time, sluggish business activity and weaker investment have led to lower imports of capital machinery, further curbing demand for foreign currency.

Officials said the central bank will continue to monitor market conditions closely and intervene as needed to ensure stability and prevent excessive volatility in the exchange rate.