Bangladesh Bank Injects $100 Million Into Forex Market

Bangladesh Bank has sold another $100 million from its foreign exchange reserves through an auction aimed at stabilising the country's foreign exchange market.

The latest sale follows a long pause in dollar sales, with the central bank selling $122 million last week. Officials said the intervention was intended to ease pressure on the market amid rising import costs, particularly for fuel and other essential commodities.

At Wednesday's auction, each participating bank was required to submit a single bid for a minimum purchase of $500,000.

The central bank had also announced an auction to sell $100 million on Tuesday. Although several banks participated, the auction was cancelled at the last moment without an explanation to the banks, according to the supplied account.

Before the fall of the Awami League government in August 2024, the central bank had sold large amounts of dollars from its reserves over three consecutive years. Reserves, which had exceeded $48 billion in August 2021, subsequently fell to $25.92 billion.

After taking office as governor, Dr Ahsan H Mansur said the central bank would not sell dollars from its reserves. The institution maintained that position under the current governor.

Reserves later recovered, surpassing $37 billion on June 29 and reaching $37.41 billion on September 1. However, they subsequently declined to $36.43 billion as of Tuesday.

A Bangladesh Bank official said expectations of an improvement in the global geopolitical situation had emerged following the US midterm elections and political developments in Israel.

Global oil and dollar prices fell on Wednesday, the official said, expressing optimism that the situation could also improve in Bangladesh.

After remaining stable for an extended period, the US dollar has strengthened against the taka in recent days.

This week, the interbank exchange rate crossed Tk124 per dollar. The dollar traded at Tk124.35 over the past two days, compared with Tk124.30 during the preceding two days.

At the beginning of October, the dollar was priced at Tk123. The rate gradually rose to Tk123.99 on the last working day of the month.

Following the fall of the Awami League government, the interbank exchange rate remained relatively stable between Tk121 and Tk122.30 for around a year and a half. However, it has gradually increased since March this year, reaching its current level.