FALLING REMITTANCE, EXPORT EARNINGS

Banks purchasing dollars heavily from BB

Staff Correspondent | Published: 00:05, Aug 31,2017

 
 

A file photo shows a man counting US dollar notes in Dhaka. Bangladesh Bank has increased the sales of US dollars in two months (July-August) of this fiscal year amid an appreciation of the greenback against the local currency, taka, on the money market.— New Age photo

Bangladesh Bank has increased the sales of US dollars in two months (July-August) of this fiscal year amid an appreciation of the greenback against the local currency, taka, on the money market.
The local banks have been facing shortage of the greenbacks in the last few months due to a falling inward remittance and export earnings, a BB official told New Age on Wednesday.
The central bank had earlier purchased greenbacks significantly from the banks with a view to stabilising the exchange rate between the dollar and the taka, but the situation has recently changed, he said.
The BB sold $10 million to the commercial banks on August 29 and $10 million on August 17.
The central bank also sold $43 million to the commercial banks in July.
The central bank started selling US dollars in February this year after a year of purchase as the taka weakened during the period against the greenback.
The taka has continued to depreciate against the dollar in the last few months as the inflow of remittance decreased significantly as many expatriate Bangladeshi workers were using illegal channels instead of banks to send money to their near and dear ones, the BB official said.
The country’s import demand also picked up remarkably in July of this fiscal year that also played a role in depreciating the taka against the dollar, they said.
The BB data showed that the dollar appreciated almost every day in the formal banking channel in July and the first week of August.
The exchange rate of the taka against the dollar has been maintaining a stable situation in the past three weeks of this month as the central bank intervened in the foreign exchange market.
The dollar was quoted (buy-sales) at Tk 80.70 on Wednesday.
The central bank had purchased dollars from the banking sector almost every day to stop a slide in the dollar rate in the last few years before starting dollar sales on a regular basis since February this year.
The BB official said that the local currency would have depreciated to Tk 85 against $1 if the central bank did not intervene in the money market.
The BB sold $175 million to the commercial banks in FY17.
The central bank did not sell any greenback in FY16 rather it purchased $4.13 billion from the local banks.
The BB, however, had sold $357 million and purchased $3.75 billion in FY15 to stabilise the money market.
The BB data showed that the exchange rate between the dollar and the taka remained stable from March 13 to October 26 of 2016 as the greenback was quoted (buy-sales) at Tk 77.40 during the period.
The exchange rate of the taka, however, was stable again in the period between December 26, 2016 and January 9, 2017. 

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