The US dollar gained strength against the Bangladeshi taka this week, surpassing Tk 122 in interbank trading for the first time in 2.5 months. This increase was influenced by various factors, including a slight rise in import-related letter of credit (LC) transactions.
Bankers traded the dollar at a maximum of Tk 122.25 per dollar, up from Tk 122 the previous day. Prior to this, on August 6, the exchange rate was even higher at Tk 122.5, as reported by Bangladesh Bank (BB) data.
The average rate of the dollar climbed to Tk 122.06 in interbank trading yesterday, compared to Tk 121.95, marking a reversal from the previous weakening trend.
A treasury head at a private commercial bank, speaking anonymously, mentioned that the central bank’s increased dollar purchases at higher rates have influenced the market rate.
Despite a 43% gain in the dollar’s value since fiscal year (FY) 2020-21, there was a 0.8% decrease by the end of September compared to the end of June. BB data up to October 20 indicated that the interbank rate hovered around Tk 121.80.
BB has already bought $2.12 billion from banks in the current fiscal year, selling dollars in the market until FY2024-25. The rise in LC openings for imports has driven up demand for the dollar, impacting the exchange rate.
Imports surged by 9.79% year-on-year to $10.8 billion in the July–August period of the current fiscal year, according to BB data.
Mohammad Ali, the managing director of Pubali Bank PLC, noted that the slight increase in the US dollar rate is primarily due to recent import payment pressures, emphasizing that there is no shortage in supply of foreign currency.
An anonymous senior official from a top import-oriented conglomerate in Chattogram expressed skepticism about the reasons behind the dollar rate hike, alleging that banks often increase rates in the final quarter of each year to enhance profits.
In May of this year, BB introduced a market-based exchange rate regime in alignment with International Monetary Fund conditions. Despite initial concerns from industry insiders about exchange rate volatility, the system has remained relatively stable until now.