Forex robust, bank liquidity eases

Bangladesh Bank intervention to bring stability in foreign-exchange market proves a boon for both -- the central bank builds up forex stock and commercial banks quench their liquidity thirst in trying times.

In a latest intervention made Sunday, the BB purchased $83 million from eleven commercial banks at rates ranging from Tk 121.47 and Tk 121.50 a dollar to stabilise the country's forex market and injected around Tk 10 billion.

The central bank has so far been bought $622 million from the commercial banks since July 13 under the prevailing free-floating exchange regime.

For the dollar buys, the banking regulator paid over Tk 75.57 billion to the banks at a time when commercial lenders largely depend on central bank's lending facility against repo to meet their local-currency obligations amid poor deposit and lending growth.

Apart from forex-market stabilisation, such regular intervention by the banking regulator to keep the exchange rate within the undisclosed band of the crawling-peg system also helps in bolstering the country's foreign-currency reserves.

Seeking anonymity, a BB official said the inflow of foreign currencies continues to grow on back of remarkable growth of remittance and export receipts in recent months while the pressure of import has yet to get momentum, which leaves a good portion of unused foreign currencies in the banks.

As a matter of fact, the official notes, the exchange rate on the interbank spot market falls and moving around the floor rate of the undisclosed band under the existing crawling-peg system.

"That's why the BB continues to intervene and purchase the US dollar from the market," the official said, adding that the BB in the last five biddings bought a total of $622 million from the market.

The central banker mentions that the intervention normally comes to prevent the downfall of taka-dollar exchange rate and to bolster the foreign-currency reserves in line with the prescription of the IMF (International Monetary Fund) under its $5.50-billion lending package to stabilise the country's macroeconomic situation.

According to BB statistics, the gross foreign-exchange reserves rose to $30.25 billion and $25.23 billion in accordance with BB and IMF's BPM6 calculations as on August 10, 2025. The figures were $29.80 billion and $24.78 billion respectively by the end of July last.

Managing Director and Chief Executive Officer of Mutual Trust Bank PLC (MTB) Syed Mahbubur Rahman says the banks managed to get the liquidity through selling the US dollars amid liquidity tightness because of low deposit growth and investment opportunities under the persisting economic sluggishness.

"And the liquidity that comes from the sale of the American greenback also makes contribution to reducing the government borrowing costs from the banks through the continuous fall in the yield on government securities market," the experienced banker explains.

According to the auction of treasury bills, the cut-off yield in 91 days, 182 days and 364 days dropped to 10.19 per cent, 10.39 per cent and 10.49 per cent respectively on Sunday from 10.45 per cent, 10.81 per cent and 10.57 per cent recorded on July 20 last.

jubairfe1980@gmail.com