Central bank pumps over $100m Thursday

The Bangladesh Bank on Thursday pumped over $100 million into the country’s banking industry to tame the volatile foreign exchange market.

The central bank on the day sold $123.50 million to banks from its forex reserves, said a senior official of the Bangladesh Bank.

Several banks, including Sonali Bank, Janata Bank, Agrani Bank and Standard Chartered Bank, took dollar support from the central bank at a rate of Tk96 per US dollar, said the official.

The official also said after allowing a floating exchange rate of the greenback, the central bank is currently providing USD support to banks only for covering government import payments.

Banks, especially the state-run ones, are taking USD support from the central bank for settling import payments of Bangladesh Petroleum Corporation, Bangladesh Agricultural Development Corporation, Bangladesh Chemical Industries Corporation among other government agencies.

During July to October 06 of the ongoing fiscal year, the Bangladesh Bank has sold over $3 billion into the banks.

The foreign exchange reserve stood at $36.57 billion on Thursday, down from $46.24 billion at the same day of last year, owing to a continuous USD selling spree by the central bank.

The highest inter-bank exchange rate on the day stood at Tk104.10 per USD, comparatively lower than the previous month when the inter-bank ex change rate for the greenback peaked at Tk107.70. The Bangladesh Bank in August last fiscal year started injecting USD into the forex market when banks began facing shortages of the foreign currency due to growing import payments, triggered by economic recovery from the Covid-19 crisis.

The currency crisis intensified just a few months later when Russia invaded Ukraine in February this year, further disrupting the global supply chain.

The central bank injected a record $7.62 billion from its reserves to banks in the last fiscal year.