Business, Front Page

BB moves to keep forex market stable

Published : 21 Jan 2021 10:19 PM | Updated : 22 Jan 2021 01:07 AM

The Bangladesh Bank (BB) resumed purchasing dollar and bought 5.49 billion US dollar directly from the commercial banks during July-December in the current fiscal year to keep the foreign exchange market stable.

Besides, the central bank is playing a crucial role to provide cash in the market by buying dollars to prevent devaluation.

Earlier, the central bank bought $1.93 billion from the commercial banks directly in FY 2017 on the same ground.

Market analysts said the BB has broken all previous records of dollar purchase in just six months in the wake of higher flow of remittance and lower imports caused by the economic slowdown amid Covid-19 pandemic.

As a result, demand for dollars decreased in the foreign exchange market, they added.

A BB senior official said the central bank has purchased the greenback from the banks aiming to protect the interests of exporters and migrant workers by keeping the exchange rate of the local currency against the US dollar stable.

Bangladesh Bank may continue purchasing dollar from the banks in order to meet the market requirement, he added.

The surplus liquidity in the banking industry witnessed a record growth to stand at Tk 182,990 crore in October, up 202 percent over the same period of the previous year.

Dr Atiur Rahman, former governor of Bangladesh Bank, told Bangladesh Post, “The central bank has taken several initiatives that includes providing an easy system giving remittance to remitters as well as buying dollars directly from the market for a stable forex market, which encouraged expatriates to send money through legal channels including banks.

Atiur also said that this is the highest monthly remittance received in the country’s history that helped push foreign currency reserves up to $43 billion. That is good news for the country, he added.

Bankers said remittance may continue its upward trend in the upcoming months as the restriction on movement globally has largely broken the global hundi cartel.

Some economists attributed the growth in remittance inflow also to a government provision of 2 percent cash incentive to remitters on inward remittance for the last fiscal year.

Remittance hit an all-time high to cross to $20 billion for the first time to stand at $21.74 billion in the last year, up 18.59 percent higher over the same period of the previous year.

On the other hand, the export earnings stood at $19.23 billion in July-December 2020.

The US dollar was quoted at Tk 84.80 in the inter-bank forex market on Thursday unchanged from the level of previous working day.