Forex reserves cross $31b, help stabilise exchange rates

Bangladesh sees its foreign-exchange reserves cross US$31-billion mark after two months, helping keep the dollar-taka exchange rate stable and economy in some good ambiance.

Analysts think regulatory intervention by Bangladesh Bank through dollar buys from the market and steady fund inflows work.

As part of the central bank's foreign-exchange-market intervention approach under the existing crawling-peg arrangement, the banking regulator purchased $149.50 million from the market through multiple- price-auction method on Thursday.

According to the latest bidding outcomes, the central bank injected around Tk 18 billion into 13 commercial banks in exchange for the US$149.50 million, at a cut-off rate of Tk 121.70 per dollar.

Under the market-intervention drives, the regulator has so far bought US$948 million in a span of the last one and a half months.

Seeking anonymity, a BB official has said the forex deals on the interbank spot market have been slowed in recent days because of lower demand for foreign currencies against supply surge.

And it slowed down the commercial bank's forex-netting drives because they were unable to sell their already-sourced dollars on the market amid low demand, the official said.

"That's why the BB came to intervene and it would help the lenders source more forex using the liquidity it injected into the banks through such purchase," the central banker told The Financial Express.

The BB official added that the central bank could also sell US dollars through similar auctions if the greenback continues to appreciate against the taka.

The official notes that such interventions are typically aimed at preventing excessive depreciation of the local currency and boosting reserves, in line with the International Monetary Fund's recommendations under its US$5.50-billion lending programme to help stabilise Bangladesh's macroeconomic situation.

According to the interbank forex-trading data of very recent days, the country's scheduled banks altogether made outright sell of $26 million on August 17, 2025.

The volume of forex deals within the banks was recorded $42 million, $42 million, $39 million, $50 million, $13.50 million and $48 million on August 19, 20, 21, 24, 25 and 26 respectively.

The central bank began this intervention on 13 July to curb volatility in the dollar-taka exchange and to ensure greater stability on the forex market.

On condition of not disclosing identity, the treasury head of a state-owned commercial bank said they changed their approach in terms of more forex buildup because they don't have any overdue payment while almost reaching NOP (net open position) ceiling due to lower demand. The senior banker thinks an expectation level has already been created on the market that the BB will keep on purchasing the US dollars from the market, which prompts some banks to hold the greenback for BB's auction.

Managing Director and Chief Executive Officer of Mutual Trust Bank PLC (MTB) Syed Mahbubur Rahman says the central bank probably looks to prevent the downfall in exchange rate amid lower demand and keep it stable so that the inflow of forex through exports and remittance remain unaffected.

"I think it's not a bad move in short term because it will help BB bolster its forex reserves that will be very helpful once the prevailing economic sluggishness will go," the experienced banker adds.

According to the official data, the country's forex reserves rose to $31.19 billion as of August 28, 2025 from July's count of $29.80 billion.

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