The Bangladesh Bank (BB), the country’s central bank, continues its strategy of purchasing US dollars from commercial banks. Today, Tuesday, the central bank bought an additional $38 million through an auction mechanism. The dollars were purchased from six commercial banks at a rate of Tk 121.80 per dollar. This latest acquisition brings the total amount of dollars bought by the Bangladesh Bank through auctions over the last three months to $2.126 billion.
The central bank is reportedly buying the surplus dollars from banks to maintain stability in the country’s foreign exchange market and to support the robust inflow of remittance and export earnings.
The continuous dollar purchases signal the strong momentum in foreign currency inflows, driven by the positive growth in both remittance and export sectors.
Bangladesh Bank began purchasing dollars via auction on July 13 of this year. Since then, it has conducted 15 auctions to control the excess supply in the foreign exchange market.
Notable recent purchases include $107 million at the beginning of this month on October 9, and $104 million on October 6.
Bankers and economists agree that stability in the dollar exchange rate is crucial. They suggest that the central bank is buying dollars from commercial banks to prevent the currency’s value from falling. A sharp appreciation (rise) or depreciation (fall) of the dollar is considered detrimental to the economy.
By purchasing dollars through the auction, the central bank provides an advantage to remittance senders and exporters. This process helps maintain the positive flow of these two key indicators, while simultaneously contributing to an increase in Bangladesh Bank’s foreign reserves.
