Bangladesh Bank sold $205 million from its foreign exchange reserves to commercial banks through an auction on Thursday (12 November). As a result, remittance houses sold dollars to commercial banks at below Tk 125.
The central bank sold the dollars at Tk 124.74 each. It also instructed the banks that took part in the auction not to resell the dollars on the interbank market, warning that such transactions could disrupt the foreign exchange market.
Earlier this month Bangladesh Bank sold $120 million at Tk 124.30 to Tk 124.35. After Thursday’s sale, the country’s foreign exchange reserves stood at $29.82 billion, down from $30.12 billion the day before. Central bank spokesperson Arif Hossain Khan confirmed the figures.
A senior official at a commercial bank said that on Thursday morning remittance houses offered dollars to commercial banks at Tk 125.30 to Tk 125.40, and some banks bought at Tk 125.30 to Tk 125.32.
After the central bank’s auction from its reserves, however, the rate eased. Several commercial banks then bought dollars at Tk 124.90 to Tk 124.95, and some bought at less than Tk 124.90.
A senior official at another commercial bank said remittance houses began offering prices below Tk 125 after the auction, meaning the sale of $205 million brought the dollar’s price down considerably. He added, though, that the central bank should take such interventions with more care.
Bangladesh Bank gave notice of the auction at 1:20pm, he said. Had the notice come in the morning, the rate could have been brought down a little further, because demand for dollars is relatively higher early in the month. If the central bank plans to sell dollars at auction, it should say so in the morning, since commercial banks also have to arrange funds in taka to buy dollars.
An official at another commercial bank said commercial banks bought more than $300 million from remittance houses on Thursday, because higher fuel oil prices are pushing up the import bill: importing the same quantity of oil now costs more than before.
One banker said $200 million is a large amount. Had the central bank released it into the market a few days earlier, the dollar would not have crossed Tk 125. The central bank should also analyse how much it needs to sell to help keep the market rate in check.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report