In response to falling prices driven by an increased supply of US dollars in the market, Bangladesh Bank has purchased $50 million from commercial banks through an auction after nearly three and a half months.
The central bank on Tuesday bought the dollars from four banks at a rate of Tk122.75 per dollar.
Prior to this, Bangladesh Bank last purchased dollars from commercial banks on May 20.
Central bank officials stated that the dollar rate was relatively low in the market on Tuesday morning.
Banks had bought dollars from remittance houses at rates between Tk122.30 and Tk122.40.
Meanwhile, the rate for settling import liabilities or Letters of Credit (LCs) ranged from Tk122.50 to Tk122.60.
However, around noon, when Bangladesh Bank announced it would buy dollars at Tk122.75, it impacted the market.
By the afternoon, many banks began purchasing remittance dollars and settling LCs at that same rate.
According to a senior commercial bank official, the central bank's purchase signals to the market that the dollar rate will not be allowed to drop below Tk122.75.
Bankers noted that commercial banks currently have an ample supply of dollars. At the same time, the pressure to settle import liabilities has reduced slightly.
Weak credit flow in the private sector has also led to lower demand for foreign currency.
Consequently, with supply exceeding demand, the dollar rate was trending downward.
Earlier late last week, the dollar rate had risen to Tk123.65.
Conversely, two weeks prior, it had fallen to Tk122.00, reflecting notable fluctuations in the dollar exchange rate over recent weeks.
Meanwhile, bankers anticipate that dollar demand may increase next month when payments owed by the Bangladesh Petroleum Corporation (BPC) fall due.
It is learned that Bangladesh Bank notified commercial banks of the dollar purchase around 1:00 PM on Tuesday.
Usually, when the central bank decides to buy dollars, it informs banks in the morning.
As a result of the late notification, banks had already settled LCs for various business entities at relatively lower rates earlier that morning.