In a ground-breaking move, the Bangladesh Bank purchased $171 million from commercial banks through its first-ever auction on Sunday, aiming to stabilise the exchange rate amid a strengthening Bangladeshi Taka.

The central bank’s intervention comes as the US dollar’s value has been declining against the Taka, driven by record remittance inflows of $30.33 billion in FY25 and robust export earnings of $48.28 billion.

The BB set the dollar purchase rate at Tk 121.50, slightly above the prevailing market rate of approximately Tk 120 offered by most banks on Sunday. This marks a significant drop from Tk 123 a week earlier, reflecting the Taka’s appreciation.

A senior BB official said, “This auction is a strategic step to maintain exchange rate stability. By buying dollars, we’re ensuring the Taka remains competitive without excessive volatility.”

The official added that the BB is prepared to intervene further, either by selling dollars through auctions if the Taka weakens or continuing purchases if the dollar’s value falls further. “We can act swiftly to keep the exchange rate balanced,” he emphasised.

A senior treasury official from a leading private bank noted, “The dollar rate was around Tk 120 on Sunday, but we expect it to align with the BB’s auction rate of Tk 121.50 today.”

The declining dollar value, fuelled by a 26.80 per cent surge in remittances and an 8.58 per cent rise in exports in FY25, prompted the BB to introduce this novel auction mechanism to manage excess dollar supply.

This auction underscores the BB’s proactive approach to navigating Bangladesh’s evolving economic landscape.

By absorbing dollars, the central bank aims to prevent the Taka from appreciating too rapidly, which could harm exporters’ competitiveness.

As the nation rides a wave of economic recovery, the BB’s innovative intervention signals a commitment to fostering stability and sustaining growth in a dynamic global market.

Source: BSS