As dollar supply remains adequate relative to demand, relief is gradually returning to the country's foreign exchange market.
Consequently, the price of the US dollar has decreased in both the interbank and commercial banking markets.
Sector insiders identify easing import cost pressures and strong growth in remittance inflows as the primary drivers of this relief.
According to the latest Bangladesh Bank data, the exchange rate per US dollar in the interbank market dropped to Tk122.63 on August 16.
On the same day, the dollar traded at Tk123 in the spot market. Just 15 days earlier, the spot market rate stood at Tk123.82 per dollar, marking a Tk0.82 decline over two weeks.
Meanwhile, commercial banks are paying Tk123.05 per dollar to settle international trade transactions and Letters of Credit (LCs).
At the beginning of the month, this rate was Tk123.95, indicating a Tk0.90 drop within the current month alone.
Industry experts note two primary factors behind the recent market stability: reduced import settlement pressures and surging remittance inflows.
Months ago, rising global fuel prices alongside Middle East conflicts drove up import costs for essential commodities like energy and fertilizer, significantly spiking domestic dollar demand.
However, the pressure of large import bill settlements has eased recently. Combined with strong remittance flows, foreign currency supply within the banking system has normalized. This balanced supply-demand dynamic has pushed dollar rates downward.
Central bank data shows that expatriate Bangladeshis remitted nearly $1.5 billion during the first 12 days of August—a 42% increase compared to the $1.05 billion received during the same period last year.
This influx has boosted market liquidity and strengthened banks' capacity to clear import obligations, reducing the scramble among importers to secure dollars.
Despite lower rates in banking channels, the effect has not fully trickled down to the curb market (open market).
On Sunday, money exchange outlets in Motijheel were purchasing dollars from walk-in customers at Tk126.60–126.70 and selling at Tk127.20–127.30.
This leaves a gap of over Tk4 between the interbank and open market rates.
Thus, while the formal banking system has reached equilibrium, demand pressures persist in the curb market.
Economists and bankers emphasize that lasting stability requires monitoring import/export revenues, foreign debt servicing, foreign exchange reserves, and overall forex demand alongside remittances.
A sudden spike in import expenses could renew demand pressures. Nevertheless, robust remittance flows and manageable import liabilities currently keep the foreign exchange market on a positive trajectory.
Insiders believe that if remittance trends continue and import costs remain contained, the forex market will stabilize further.
This would lower costs for importers, reduce market volatility, and potentially offer indirect price relief on import-dependent consumer goods and raw materials.
