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In a renewed effort to stabilise the exchange rate of the US dollar against the Bangladesh Taka (BDT), the central bank stepped into the foreign-exchange market once again on Tuesday, with a buy of US$313 million through an auction.
This marked the Bangladesh Bank's (BB) second intervention in just three days, following its earlier purchase of $171 million from 18 banks on Sunday.
The interventions come amid a consistent decline in the dollar's value against the local currency.
The central bank has purchased a total of $484 million in two separate auctions this week. The purchased greenback is expected to help improve the country's forex-reserve position.
"We've intervened in the market again to keep the exchange rate stable," a senior BB official told The Financial Express. He also noted that the central bank would continue to monitor the situation and intervene whenever necessary to maintain stability in the exchange rate.
On Tuesday, BB accepted bids worth $313 million from 22 commercial banks at a maximum cut-off rate of Tk 121.50 per dollar, according to officials familiar with the auction process.
Under current procedures, the central bank determines the cut-off rate based on several factors, including the spot reference exchange rate, the real effective exchange rate (REER), and inflationary pressures in the economy, the officials explained.
Interestingly, the Taka appreciated slightly against the US dollar on Tuesday, despite Sunday's market intervention.
The reference rate of the greenback fell to Tk 121.1108 per dollar at 5:00 pm, down from Tk 121.1375 on the previous working day, according to the central bank's latest data.
Market insiders said the exchange rate has been experiencing a downward trend in recent weeks, largely due to stronger inflows of remittances and export earnings.
They also pointed to lower import demand and ongoing tariff negotiations with the United States as contributing factors in reducing pressure on the dollar in the local market.
Describing the intervention as a positive signal from the central bank, a senior treasury official at a leading private commercial bank remarked that the move would help restore order and confidence in the foreign exchange market.
"Exporters as well as remitters will benefit from such intervention," the banker added in response to a query.
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