Muhammad Tarekul ; DHAKA – After a hiatus of one and a half months, Bangladesh Bank has resumed purchasing US dollars from the local market. On Wednesday, the central bank bought $70 million from a commercial bank at a rate of 122.75 BDT per dollar.
This marks the first significant intervention since March 2, when the bank purchased $25 million at 122.30 BDT.
With this latest move, the total dollar purchase for the current fiscal year has reached $5.56 billion, successfully pushing the country’s foreign exchange reserves (calculated under the BPM6 manual) back above the $30 billion milestone.
Market Stability and Political Shift
Following the political transition and the formation of the new government led by the Bangladesh Nationalist Party (BNP), the foreign exchange market initially saw a period of calm. However, recent tensions in the Middle East caused slight fluctuations in the exchange rate.
While the dollar rate had remained steady between 122.25 and 122.30 BDT for nearly a year and a half, it spiked to 122.75 BDT by mid-March. In response to this purchase, the central bank injected 859 crore BDT into the market, providing much-needed liquidity to commercial banks.
Trade Deficit and Remittance Surge
Despite a widening trade deficit—which hit nearly $17 billion in February due to rising imports and falling exports—the economy has been bolstered by a robust flow of remittances.
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Remittance Data: In the first 14 days of April, expatriates sent $1.61 billion through official banking channels.
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Growth: This is a 25% increase compared to the same period in the previous fiscal year.
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Annual Total: Total remittances for the current fiscal year have reached $27.82 billion, reflecting a 20.60% growth rate.
Reserve Recovery Path
The country’s reserves have seen a dramatic journey. From a peak of over $48 billion in 2021, they plummeted during the global energy crisis and domestic political unrest. At the time of the previous government’s departure, BPM6 reserves were as low as $20.48 billion.
As of yesterday, Bangladesh’s gross reserves stand at $34.87 billion, while the BPM6-compliant reserves are at $30.20 billion. Analysts believe that if the current remittance trend continues and Middle East tensions de-escalate through ongoing ceasefire talks, the pressure on the dollar market will continue to ease.