Central bank buys another $89m from banks

The Bangladesh Bank purchased $89 million more through auction from seven banks in the interbank spot market on Tuesday, aiming to keep the exchange rate of the US dollar against the local currency stable.

The purchase was made under the Multiple Price Auction method, and the cutoff rate was Tk 122.30 per dollar, according to central bank officials.

Since July 13, the central bank has bought $3.13 billion from banks directly under the prevailing free-floating exchange rate arrangement, its latest data shows.

"We are purchasing the US dollars from scheduled banks to help exporters as well as remitters by keeping the exchange rate stable," a senior central bank official told The Financial Express while explaining the main objective of the ongoing intervention in the foreign exchange market.

The liquidity situation of some banks, including the troubled ones, has improved gradually as they sold the US currency to the central bank, according to the official.

He said the intervention was also contributing to the gradual strengthening of the country's foreign exchange reserves.

Meanwhile, Bangladesh's gross forex reserves rose to $32.80 billion on December 24 from $32.72 billion on December 22, as per the central bank's traditional calculation method.

But according to the International Monetary Fund's Balance of Payments and International Investment Position Manual (sixth edition), generally known as BPM6, forex reserves increased to $28.11 billion on December 24 from $28.04 billion on December 22.

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