BB sells record $9.67b to stabilise forex market

Staff reporter :
Bangladesh Bank (BB) pumped record $9.67 billion into the foreign-exchange market in last seven and half months of the current financial year to ease forex market crunch.
As banks faced problems in settling letter of credit due to the dollar crisis, BB sold $64 million in last week. Consequently, foreign exchange reserves dropped to $32.60 billion, according to the data from Bangladesh Bank.
Earlier, Bangladesh Bank has sold $9.2 billion in the first seven months (July-January) of this fiscal year of 2022-23. Although, in the last financial year (2021-2022), the central bank entirely sold $7.62 billion to foreign-exchange market.
Due to the significant dollar sales, the country’s foreign-exchange reserves have decreased to $32.60 billion dollars which were $45.39 billion at this month of 2022. In last one year, foreign reserves sharply decreased by $12.79 billion. The exchange rate rose sharply to Tk 107 from Tk 84.8 against the US dollar within a year.
However, according to the International Monetary Fund (IMF), the reserves are now a little over $24 billion, if dollars lent to Biman, Payra port etc are netted off.
Amid the import surge, demand for dollars on the local market soared, which prompted the country’s banks to buy greenbacks from the central bank to settle import payments.
To facilitate imports of goods necessary for Ramadan amid a crunch, more stressing the BB foreign exchange reserve.
Despite, discouraging imports of luxury and non-essential commodities, the import reached $41.19 billion during the July-December in current fiscal year while the export earnings in the July-January period of the FY 2022-2023 are totaled to $32.44 billion.
The country’s forex reserves have maintained a downturn in recent months following higher import-payment and relatively lower flow of inward remittances.
Bangladesh Bank is taking necessary measures to gradually move towards a market-based, flexible, and unified exchange rate regime (within a 2.00 per cent variation) by the end of this financial year.