The Bangladesh Bank received about $588 million from 11 banks under its new currency swap arrangement, which began on February 15.
However, there were no instances of banks receiving dollars from the central bank in exchange of the taka under this arrangement, Md Mesbah Ul Haque, spokesperson and executive director of the central bank, said on Tuesday.
Eleven banks received about Tk6,468 crore in total by depositing the dollar amount, mostly for a 30-day tenure.
They can reclaim their respective dollar amounts after repaying the taka to the central bank and settling the interest rates with the BB.
Therefore, the country's foreign exchange reserves, according to the International Monetary Fund's BPM6, increased to $20.5 billion on February 25, from $19.93 billion on February 14, BB officials said.
On February 15, the BB approved currency swap arrangement between the central bank and the commercial banks.
With the new swap arrangement, commercial banks allowed exchange of the taka for the dollar, or vice versa, with the Bangladesh Bank.
The central bank said that under this arrangement, a minimum of $5 million or its equivalent in Taka could be swapped.
The swap will be for a minimum of seven to a maximum of 90 days.
According to the circular, if the commercial banks have surplus dollars, they can deposit them in the Bangladesh Bank and receive the equivalent amount in the taka.
Likewise, they can deposit takas in the central bank and receive the equivalent amount in dollars or other approved foreign currencies, the circular said.
To avail the currency swap facility, interested banks will have to enter into an agreement with the central bank.
According to that agreement, on the day when commercial banks deposit dollars in the Bangladesh Bank, they will receive the equivalent amount in the taka based on the exchange rate of the dollar on the day.
Similarly, after a specified period, they will be able to deposit takas and receive the equivalent amount in dollars, with paying or receiving an interest margin.
However, for Shariah-based banks, there would be no interest margin.
Currency swap is an agreement between two parties (in this case, the Bangladesh Bank and the commercial banks) to exchange a specified amount of one currency for another currency at an agreed-upon exchange rate on a specified date.
Currency swaps are often used to hedge against foreign exchange rate risk or to obtain foreign currency funding at more favourable rates.
Rollover of swap deals will be allowed, subject to prevailing rates.
