BB sells $305m in August to halt taka slide

The Bangladesh Bank has begun selling the American greenback as the local currency taka is experiencing a depreciating trend after more than a year following a decline in remittance and also an increase in imports.

In order to tackle the devaluation of the local currency, the central bank has already sold $305 million to the country’s banking sector only in August, 2021, data from the BB showed.

According to BB data, The inter-bank exchange rate stood at Tk 85.20 per dollar on August 31 from Tk 84.80 a year ago, the same level it had hovered around since July last year.

The interbank exchange rate of US dollar was Tk 84.8 in August 2020, Tk 84.5 in 2019, Tk 83.75 in 2018, Tk 80.7 in 2017, Tk 78.4 in 2016, says BB data.

Though the central bank had earlier purchased the dollar amounting to $205 million till July, this year, it has now started selling the greenback from the month of August to meet the growing demand of US dollars. The BB purchased $7.93 billion US dollar from the local banks in the last fiscal year.

Bankers said the demand for foreign currency would increase further in the coming days as the wheel of the economy is turning around, shrugging off the sluggishness created by the ongoing pandemic.

One of the reasons behind the rising of the US dollar exchange rate trend is the increasing import payment as the country’s business and the economy started to regain from the pandemic fallout,” said Agrani Bank managing director and CEO Mohammad Shams-Ul Islam while talking to The Business Post.

Import payment will be increased further in the coming days when the economy and the business will also fully be recovered, he added.

In the July-June period of last fiscal year, import payment rose by 19.71 per cent to $60.68 billion, BB data shows.

Shams-Ul Islam said that the slowdown of remittance is also another reason for the increasing demand for the US dollars.

Remittance inflow fell by nearly 28 per cent to $1.87 billion in July, the first month of FY’ 2021-22, from $2.6 billion in the same month of the previous fiscal.