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The US dollar gained further against Bangladesh taka last week reducing gap between buying and selling rates in the interbank foreign exchange market. The nationalised banks adhered to their earlier trend in raising the selling rates of the greenback that added gains to the dollar despite lower demand. The dollar maintained its high level in the local informal market.
The exchange rate of the greenback moved between Tk 65.60 and Tk 65.75 against previous week's range Tk 65.50 and Tk 64.75. The greenback, however, was traded at rates between Tk 65.55 and Tk 65.70 for one session in the middle of the week. The dollar also remained steady at its high level in the local informal market.
The total interbank spot transaction was about 6.50 million dollar against that of previous week's around 12.50 million dollar, indicating a slash in demand for the greenback in the interbank market. The pressure on interbank market was lower, as some private sector banks used swap facility, they said.
The central bank injected the dollar into the market through the nationalised commercial banks (NCBs) to indirectly ensure steady flow of the greenback in the foreign exchange market. The nationalised banks performed were the major suppliers of the dollar in the market. They preferred to transact the dollar at high rates for drawing increased inward remittance through the banking channel. The speculations on the foreign exchange market were almost absent. The stakeholders and the private sector dealer banks made active response to the central bank's directives to keep the foreign exchange market sound and rate stable, fund managers said.
The central bank tried to strengthen its monitoring and supervision over activities of the dealer banks to ensure appropriate use of the foreign exchanges and check and control misuse of the greenback. The central bank asked the dealer banks to make proper use of the greenback in opening import letters of credit. The alert roles of both the central bank and the dealer banks improved the overall foreign exchange management, they said.
The private sector dealer banks earlier took voluntary initiative to maintain stable foreign exchange rates and they proved their success in making the voluntary effective. They were able to keep the exchange rates of the dollar at reasonable level. It resulted in raising the lower edge of the dollar, while the upper edge remained stable. Some private sector local banks and foreign banks readjusted the exchange rates of the dollar to respond to the market trend, fund managers said.
The dealer banks continued to provide prompt and improved services encouraging Bangladeshi expatriates to transfer their funds through the banking channel. The dealer banks were also alert to make immediate delivery of remittance to the beneficiaries, they added.
The supply of the dollar was mainly nourished with inward remittance and inflow of export income. The supply was sufficient to accommodate to the demand for the greenback, fund managers said.
The central bank used its reverse repurchase agreement auction tool to maintain the call money rate at a reasonable level to so that buying of the greenback with borrowed fund become costly to discourage stakeholders putting pressure on foreign exchange market. The dealer banks had to submit their daily foreign exchange transaction reports to the central bank in prescribed formats, they said.
The nationalised banks transacted the dollar predominantly at rates between Tk 65.55 and Tk 65.60 against previous week's range between Tk 65.50 and Tk 65.55. The private sector banks, local and foreign, made transactions of the greenback among them at rates between Tk 65.60 and Tk 65.75 in the interbank market., they added.
The dollar was traded at rates between Tk 67.60 and Tk 67.90 in the local informal market.
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