MNA Business Desk: The local currency has depreciated by Tk 1.0 against the US dollar so far this year in the inter-bank foreign exchange market as demand for the greenback grew.
The dollar was quoted at Tk 84.90 each in the inter-bank forex market on November 27 against Tk 83.90 on January 02 this calendar year, according to the market operators.
The demand for the greenback is gradually increasing, mostly driven by higher import payment, particularly for intermediate goods, oil and capital machinery for power plants.
The Bangladesh Taka’s erosion was equally blamed on the falling trend in the export income during the first four months of this fiscal.
Bangladesh’s export income dropped by nearly 7.0 per cent to $12.72 billion during the July-October period of fiscal 2019-20, from $13.65 billion in the same period a year earlier.
On Wednesday, the BDT depreciated by 10 poisha to Tk 84.90 each against Tk 84.80 of the previous working day.
Meanwhile, the country’s forex reserves stood at $31.69 billion on Thursday from $31.72 billion of the previous working day after selling of greenback to the banks.
This means more than five months of import bills can be settled with the existing reserves.
The forex reserves fell to $31.60 billion on November 07 from $32.60 billion of the previous working day after making a routine payment of more than $987 million to the Asian Clearing Union, or ACU, against imports during the September-October period of the year.
Senior bankers, however, predicted that the pressure on the country’s foreign exchange market would increase in December due to the lower export income in recent months.
The demand for greenback may increase further in near future unless the central bank offers its adequate foreign currency support, they said.
“The pressure on the country’s foreign exchange market may increase in December due to the lower export income in recent months,” Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh, or ABB, told the FE earlier.
Given the situation, the central bank has continued providing forex support to banks through the sales of US dollars to keep the market stable.
As part of the initiative, the Bangladesh Bank, or BB, has supported three state-owned banks to help them meet the soaring demand.
“We sold $20 million more to the public banks at market rate in the last week to help them make import payment obligations, particularly for oil,” a senior official of the central bank told the FE on Friday.
The US dollar was quoted at Tk 84.90 each on Thursday in the inter-bank forex market, unchanged from the previous level, according to the market operators.
The BB official said the central bank may continue providing such foreign currency support to the banks in line with the market requirement.
A total of $299 million has been sold to the banks so far this fiscal, as part of the central bank’s ongoing support.
In FY’19, the BB sold $2.34 billion to the banks on the same ground, according to data available with the central bank.