Forex market steadies as dollar inflows go up
Business Desk :
The country’s foreign exchange market is stabilising thanks to a surge in US dollar (USD) inflows, driven by higher remittances, stronger export earnings and tighter oversight by the central bank.
The interbank exchange rate moved from Tk 121.80 per dollar at the end of September to Tk 122.58 on November 20 amid a pickup in fuel and fertiliser imports,according to the ‘Exchange Rate & Foreign Exchange Market Dynamics’ report published by the Bangladesh Bank on Tuesday.
It later appreciated to Tk 122.22 by the end of November as liquidity improved.
On a year-on-year basis, the taka recorded a 1.90 per cent nominal depreciation in November, the report said.
Bangladesh Bank said that a surplus of $1.09 billion in the overall balance of payments in July-October of FY26 supported the foreign exchange market, reversing a $2.19 billion deficit in the same period of the previous fiscal year.
The improvement came mainly from the financial account.
However, the current account posted a deficit of $749 million in July-October, slightly wider than the $640 million deficit a year earlier, as import growth outpaced exports.
Imports grew by 4.5 per cent in July-October of FY26, driven largely by higher purchases of fuel, fertiliser and capital machinery.
Export growth slowed to 1.1 per cent year-on-year in July-November, reflecting weaker performance in readymade garments.
In contrast, remittance inflows through formal channels rose strongly by 17.1 per cent to $13.04 billion in July-November, supported by exchange rate incentives and tighter monitoring against informal transfers.
Foreign exchange reserves rose to $28.00 billion on November 6 before declining to $26.40 billion at the end of the month due to payments to the Asian Clearing Union.
Market activity increased during the period.
Average daily interbank spot transactions climbed to $50.27 million in November from $37.86 million in September.
The share of spot transactions rose to 41.47 per cent, while swap transactions declined in both volume and share.
Daily spot transactions ranged between $10 million and $85.50 million in November.
Exchange rate flexibility increased compared with September.
The daily average spread in banks’ selling rates narrowed to Tk 1.08 per dollar in November from Tk 1.61 in September, indicating improved liquidity. However, variability in exchange rates edged up in October and early November before moderating toward the end of the month.
The nominal effective exchange rate index rose slightly to 68.32 in November from 68.04 in September, though it marked a 3.96 per cent depreciation year-on-year.
The real effective exchange rate climbed to 106.37, reflecting higher domestic inflation relative to trading partners and suggesting some scope for further nominal adjustment.