In a first of intervention in foreign-exchange market, Bangladesh Bank on Monday auctioned the US dollar to tame a sudden exchange-rate upturn.
The Bangladesh Bank (BB) sold $11.50 million to five banks on the day through what stands out as first-ever auction-based dollar sale by the regulator in the country.
The regulatory move comes against the backdrop of a rising trend in the exchange rate of the US currency against the Bangladesh taka (BDT) recent days following higher import-payment obligations, according to market operators.
They also said comparatively lower remittance inflows, particularly in the middle of each month, had pushed up demand for the greenback on the market.
The local currency depreciated by Tk0.04 to Tk123.20 per dollar on Sunday from Tk123.16 on the previous day on the interbank market, according to the central bank monitoring report.
It was Tk123.03 per dollar on Thursday.
The Taka depreciation against the US dollar accelerated in early trading on Monday, with the interbank exchange rate climbing as high as Tk123.35 by noon, the market operators added.
Following the upward movement in the exchange rate, the central bank issued an auction notice to sell $20 million to interested banks aiming to maintain stability on the foreign-exchange market.
The BB, however, sold $11.50 million to five commercial banks at rates ranging from Tk122.80 to Tk123.35 per dollar on the interbank market, according to central bank officials.
Earlier on July 13 last year, the central bank began intervening in the forex market by purchasing $171 million from banks through a similar auction, with the same objective of stabilizing the exchange rate.
