Staff Reporter :
Bangladesh Bank (BB) has identified key factors driving the rising demand for US dollars, contributing to volatility in the foreign exchange market.
In a statement released yesterday, Husneara Shikha, Executive Director and Spokesperson for the central bank, noted that December traditionally experiences heightened dollar demand due to year-end financial obligations.
“The repayment deadlines for various foreign loans and deferred payments typically fall during this month, creating additional pressure on the market,” she explained.
Additionally, the central bank’s decision to halt dollar sales in the interbank market to meet International Monetary Fund (IMF) targets has further tightened supply.
The central bank also highlighted the adverse effects of Bangladesh’s
downgraded credit rating, which has strained correspondent banking relationships with foreign institutions.
This situation has hindered the opening of Letters of Credit (LCs), delayed the maturity of deferred payments, and disrupted offshore banking loans.
A recent BB directive mandating foreign debt repayments by December has further compounded market pressures.
Shikha also emphasised inefficiencies in remittance collection as a destabilising factor, citing monopolistic practices and the involvement of intermediaries.
“The role of aggregators in remittance collection has significantly impacted exchange rate stability,” she remarked.
Commercial banks are grappling with mismatches between dollar inflows and outflows, exacerbating market volatility.
Bangladesh Bank assured stakeholders that it is actively monitoring the situation and implementing measures to stabilise the market while ensuring alignment with its broader economic objectives.
