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The US dollar hit its record high against the Bangladesh taka last week in the inter-bank foreign exchange market, as the demand for the greenback was extremely high while speculations strongly influenced the market.
The stakeholders remained shy to make transactions in dollar that put pressure on other foreign currencies. The dollar was also firmer in public deals as well as in transactions in the local informal market, fund managers said.
The exchange rate of the greenback varied between Tk 68.00 and Tk 71.40 in the interbank foreign exchange market against the previous week's range between Tk 67.65 and Tk 67.90. The main trend in the interbank dollar rate was between Tk 68.14 and Tk 68.20, they said.
The rates varied between Tk 68.80 and Tk 71.20 in the local informal market against the previous week's range between Tk 67.80 and Tk 69.20. The brokers purchased the dollar mainly at rates between Tk 68.80 and Tk 70.00 and sold it between Tk 70.00 and Tk 70.20, money dealers said.
The cash dollar was firmer in public deals and it was traded between Tk 67.70 and Tk 72.24 against the previous week's range between Tk 68.90 and Tk 72.12.
The spot direct transaction in dollar was insignificant, as around 2.40 million dollars changed hands in the week. The total interbank spot transactions of the foreign exchanges were equivalent to 55.20 million dollars in the week against that of around 27.00 million dollars of the previous week, reflecting a significant rise in demand for the greenback. The average use of swap facility by dealer banks was higher, as they remained interested in small swap deals against customer requirements to fund their import payment obligations instantly, they added.
The higher demand for the dollar was attributed to increased import payments. The supply line was mainly nourished through inward remittance and also with export proceeds. The total liquid holding of the banking system helped maintain the balance between supply and demand. The growing demand for the greenback was, however, faster than supply that added gains to the dollar, they added.
The central bank tried to squeeze credit outflow and check unnecessary imports to reduce the pressure on foreign exchange market. It also discussed with top bankers and trade body leaders how to review the situation. The high exchange rates of the dollar offered by the commercial banks, however, encouraged Bangladeshi expatriates to send their money through the banking channel. This trend resulted in record inflow of remittance into the market, fund managers said.
The market was volatile as the taka depreciated remarkably in a week in the inter-bank exchange market as well as in public deals, they said.
The central bank's monitoring and supervision activities to protect the taka from weakening appeared as a futile effort. The central bank used the reverse repurchase agreement (repo) tool to maintain high interbank call money rate with the aim of discouraging excess buying of the dollar, they said.
A limited number of the private sector commercial banks performed as major sellers in the inter-bank market, they said.
In the regional market, most of the currencies were steady against the dollar. The exchange rate of the Indian rupee against the taka ranged between Tk 1.48 and Tk 1.61. The exchange rate of the dollar against the Indian rupee varied between Rs 44.15 and Rs 44.42. The Pakistani rupee ranged between Rs 59.94 and Rs 60.05.
The exchange rate of the dollar against the Malaysian ringgit varied between 3.7050 ringgit and 3.7260 ringgit and against the Thai baht between 38.81 baths and 39.23 baths.
In the international market, the dollar was traded between 115.50 yen and 117.86 yen against the previous week's range between 115.72 yen and 118.55 yen. The euro was traded between 1.1920 dollar and 1.2043 dollar against the previous week's range between 1.1845 dollar and 1.1975 dollar.
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