The US dollar posted significant gains against the Bangladesh taka last week in the inter-bank foreign exchange market due to high demand for the greenback influenced by import obligations. Strong speculations influenced the market. The stakeholders were active in making transactions in dollar putting pressure on greenback. The dollar was firm in public deals. The local informal market also remained active with stronger dollar, funds manager sources said.
The exchange rate of the greenback varied between Tk 69.05 and Tk 72.00 in the interbank foreign exchange market against the previous week's range between Tk 68.00 and Tk 71.40. The main trend in the interbank dollar rate was, however, between Tk 69.15 and Tk 71.50, they said.
The rates varied between Tk 70.80 and Tk 71.50 in the local informal market against the previous week's range between Tk 68.80 and Tk 71.20. The brokers purchased dollar mainly at rates between Tk 70.80 and Tk 71.00 and sold it between Tk 71.20 and Tk 71.50, money dealers said.
The cash dollar was firmer in public deals and it was traded between Tk 68.80 and Tk 72.24 against the previous week's range between Tk 67.70 and Tk 72.24.
The spot transactions in dollar were significantly high, as around 11.25 million dollar changed hands in the week against around 2.40 million dollars of the previous week, reflecting a remarkable rise in demand for the greenback, while the total transactions in foreign currencies in the week were equivalent to about 78 million dollars against the previous week's 77 million dollars. Besides, the average use of swap facility by dealer banks was also higher. The week's total swap transactions stood at around 17.5 million dollars against the previous week's about 10 million dollar. The dealer banks showed interest in small swap deals against customer requirements to fund their import payment obligations instantly, they added.
The increased import obligations resulted in higher demand for dollar, while inward remittance contributed to the supply. The export earnings also helped nourish the supply line. The total liquid holding of the banking system facilitated maintenance of balance between supply and demand. The supply was, however, insufficient to meet the growing demand for the greenback, they added.
The central bank adhered to policy of squeezing credit outflow and checking unnecessary imports to reduce the pressure on foreign exchange market. The high exchange rates of dollar offered by the commercial banks, however, encouraged Bangladeshi expatriates to send their money through the banking channel, which was seen as a positive contribution of strong dollar, fund managers said.
The central bank also intensified its monitoring and supervision activities to prevent the foreign exchange market from facing further instability. It continuously used reverse repurchase agreement (repo) auction to maintain high interbank call money rate to discourage stakeholders from buying excess dollar, they said.
Some 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 44.28 and Rs 44.50. The Pakistani rupee ranged between Rs 59.92 and Rs 60.23.
The exchange rate of the dollar against the Malaysian ringgit varied between 3.7025 ringgit and 3.7260 ringgit and against the Thai baht between 39.08 baths and 39.23 baths. In the international market, dollar was traded between 117.40 yen and 119.15 yen against the previous week's range between 115.50 yen and 117.86 yen. The euro was traded between 1.1861 dollar and 1.2094 dollar against the previous week's range between 1.1920 dollar and 1.2043 dollar.