Bangladesh Bank is providing timely support to exporters and remitters by purchasing dollar from commercial banks to stabilize the foreign exchange market, experts said.
They said the central bank has protected exporters and remitters from the appreciating trend of the local currency against US dollar, helping to boost remittance and export earning amid coronavirus pandemic.
Although the export earnings and remittance inflow have significantly increased in recent months defying the uncertainty stemming from the ongoing economic slowdown, exporters and remitters are still facing different problems amid crisis, they said adding that they get more money due to still holding strong position of greenback against Taka.
A central bank official said the central bank is providing cash in the market by buying dollars to prevent devaluation of dollar. Otherwise, the greenback would be devaluated against Taka, which can reduce earning from export and remittance.
In the first four and half months of the current fiscal year, it has bought $4.30 billion directly from the commercial banks.
At the same time, Bangladesh Bank has released almost Tk 36,464 crore in cash in the market to stabilize the supply of local currency.
Serajul Islam, spokesman and executive director of Bangladesh Bank said that buying and selling of dollars from the market is a regular activity of the central bank.
“This is done to keep the market stable. When the supply of dollars increases in the market, it is bought. Again, it is sold when there is a shortage,” he explained.
Dr Atiur Rahman, former Bangladesh Bank governor, told Bangladesh Post, “The central bank has taken several initiatives including 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 helping push foreign currency reserves up to $41 billion that is good news for the country.
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 the dollar from the banks in order to meet the market requirement, he added.
Earlier, the central bank bought $1.93 billion from the commercial banks directly in FY 2017 on the same ground, he mentioned. However, the central bank did not sell a single dollar in the market in the three previous fiscal years.
The US dollar was quoted at Tk 84.80 in the inter-bank forex market on Monday unchanged for the last three months due to the central bank intervention.
Market analysts said exports and remittance increased and imports declined amid coronavirus pandemic. As a result, demand for dollars decreased in the foreign exchange market, they added.
As per the BB report, the country’s import payments in July-September of FY21 stood at $1,173.60 crore while the country’s export earnings in same time stood at $969.70 crore.
As a result, the overall trade deficit at the time stood at $203.9 crore.
During the time, the export earnings increased by about 3 percent while the import expenditure decreased by 11.47 percent.
On the other hand, despite the global coronavirus pandemic, Bangladesh’s remittance inflow shows a stronger growth to reach a new record of $8.83 billion in the first four months in the current fiscal, up 43.24 percent over the same period of the previous fiscal.
This figure was $6.16 billion in the same period of the fiscal year 2019-2020.