Taka has depreciated further against US dollar by Tk 0.40.
The interbank exchange rate stood at Tk 87.90 per dollar on Monday, up from Tk 87.50 on Sunday, a high official of Bangladesh Bank confirmed to The Business Post.
Due to the Covid-19 impact and the Russia-Ukraine war, costs of product supply and delivery go up. As a result, the currency of Bangladesh began losing its value like many other currencies in the world for raising the demand of US dollars.
The demand for dollar recently grew primarily due to rising import payments. Such payments stood at $61 billion between July and March of this fiscal year while export earnings were $36 billion, resulting in a trade deficit of $25 billion, the central bank data shows.
To meet the growing demand, the central bank has continuously been injecting dollar into the market since August last year. It injected over $5 billion into the banking sector till May 16.
The central bank devalued taka by 80 paisa against dollar on May 16, the highest depreciation of the local currency in a single day. The interbank exchange rate then stood at Tk 87.5 per dollar, up from Tk 86.7 a day before.
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The dollar exchange rate in the kerb market crossed Tk 100 for the first time on May 17. Money changers in the capital sold each dollar for Tk 102, up from Tk 98 a day previously.
The country’s foreign exchange reserves are declining day by day due to growing import payments and a downward trend in remittance earnings. Remittance was down by 16.25 per cent to $17.3 billion in 10 months of this fiscal year, the central bank data shows.
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Forex reserves fell to $41.92 billion on May 11 after paying the Asian Clearing Union $2.24 billion, as per the central bank data. There was $46 billion in reserves on February 28 this year.
However, the country's foreign exchange reserves on May 22 increased to $42.30 billion, as it was $41.92 billion on May 10, which is enough to cover imports for six months.