In a strategic move to maintain stability in the foreign exchange market, Bangladesh Bank (BB) purchased $123 million from eight commercial banks on Sunday, February 22. The dollars were bought at a cut-off rate of 122.30 BDT, according to central bank officials.
This latest intervention brings the total volume of US dollars purchased by the central bank in the current 2025-26 fiscal year to over $5.38 billion. As a result, the country’s gross foreign exchange reserves have surged, nearing the $35 billion mark.
Shift from Seller to Buyer
For the past three fiscal years, Bangladesh Bank was forced to sell nearly $34 billion from its reserves to cool down an overheated market. However, the tide has turned following a significant crackdown on money laundering and a sharp rise in remittance inflows.
Historical Context of Dollar Sales:
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FY 2021-22: $7.6 billion sold
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FY 2022-23: $13.5 billion sold
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FY 2023-24: $12.79 billion sold
In stark contrast, the central bank has already purchased $5.38 billion this fiscal year alone, reflecting a robust recovery in dollar supply.
Protecting Remittance and Exports
Executive Director and Spokesperson of Bangladesh Bank, Arif Hossain Khan, confirmed that the market currently sees a surplus of dollars. “Supply is currently higher than demand. If the central bank does not intervene, the price of the dollar could drop significantly, which would negatively impact our expatriate remitters and the export sector,” he explained.
By purchasing excess dollars through the Multiple Price Auction (MPA) method, the central bank is preventing an artificial appreciation of the Taka, thereby ensuring that exporters and migrant workers remain competitive and motivated.
Record Remittance Inflow
The surge in reserves is largely attributed to a massive jump in remittances. In January alone, expatriates sent $3.17 billion back to Bangladesh—a staggering 45.10% increase compared to the same period last year.
Reserve Status at a Glance:
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Gross Reserves (Total): $34.78 billion (as of Feb 19)
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BPM6 Standard Reserves: $30 billion
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Historical Peak: $48 billion (August 2021)
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Recent Low: $20 billion (August 2024, following the change in government)
Market Sentiment
Analysts suggest that these market-based interventions are crucial for restoring investor confidence. By acting as a “buyer of last resort,” the central bank is not only strengthening the national buffer but also creating a predictable environment for international trade.
