The US dollar gained ground against Bangladesh taka significantly last week in the interbank foreign exchange market, as the nationalised banks maintained the trend in raising their selling rates despite lower demand for the greenback. The policy drive focussed on reducing the difference between buying and selling rates of dollar.
The exchange rate of the greenback moved between Tk 65.40 and Tk 65.75 against previous week's range of Tk 65.20 and Tk 65.75. The greenback, however, ended the week at rates between Tk 65.50 and Tk 65.75. The dollar also marked remarkable rise in the local informal market.
The private sector dealer banks, however, adhered to their voluntary commitment to keep the upper edge of the dollar at a stable stage. The lower edge of the dollar rose significantly from that of the previous week.
The total interbank spot transaction was about 10.50 million dollar against that of previous week's around 12.80 million dollar, reflecting a slash in demand for the greenback in the interbank market. The private sector banks helped to divert some pressure from the inter-bank market by using swap facility, they said.
The improvement of the foreign exchange management was apparent, as the exchange rate of the dollar moved at an expected range. The gains added to the greenback were attributed to the nationalised banks' raising of selling rate of the dollar in the interbank market, fund managers said.
The central bank facilitated the market by injecting the dollar through the nationalised commercial banks (NCBs) that helped maintain steady flow of the greenback in the foreign exchange market. The NCBs were the major suppliers of the dollar in the market. The nationalised banks transacted the dollar at high rates to draw increased remittance from expatriates through the banking channel. The speculations among the stakeholders almost eased and the private sector dealer banks readjusted the exchange rates of the dollar. Some foreign banks and private sector local banks raised the exchange rates of the dollar on the ground of higher import payments, fund managers said.
The mainly concentrated on checking the demand for the greenback and it further sharpened its monitoring and supervisory functions over activities of the dealer banks. The dealer banks remained responsive to the central bank's initiatives for ensuring effective and appropriate use of the greenback in opening import letters of credit. The measures helped to improve overall foreign exchange management, they said.
The supply of the dollar was steadily maintained through inward remittance and inflow of export income. The supply was adequate to match with the growing demand for the greenback. The dealer banks provided prompt and improved services encouraging Bangladeshi expatriates to transfer their funds through the banking channel. The dealer banks also tried to make immediate delivery of remittance to the beneficiaries, fund managers said.
The central bank conducted reverse repurchase agreement auction to keep the call money rate at a high level so that buying of the greenback with borrowed fund become costly to discourage stakeholders putting pressure on foreign exchange market. The central bank also maintained strong watch on dealer banks to ensure that they submit their daily foreign exchange transaction reports in prescribed formats, they said.
The private sector banks, local and foreign, made transactions of the dollar among them at rates between Tk 65.60 and Tk 65.75 in the interbank market. The nationalised banks, however, transacted the greenback mainly at rates varying between Tk 65.40 and Tk 65.50 against previous week's range between Tk 65.20 and Tk 65.40, they added.
The dollar was traded at rates between Tk 67.30 and Tk 67.80 in the local informal market against the previous week's range between Tk 66.00 and Tk 66.80. The brokers purchased the dollar mainly at rates between Tk 67.30 and Tk 66.50 and sold it between Tk 66.60 and Tk 67.80, money dealers said.
The dollar remained firm in public deals and it was traded between Tk 64.80 and Tk 66.96 against previous week's spread between Tk 64.80 and Tk 66.98.
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 1.53.