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currency roundup
Gap between buying and selling rates of greenback declines
Sarwar Zahan
10/16/2005
The US dollar ended last week with its ground gaining further against Bangladesh taka reducing the gap between buying and selling rates to a minimum in the interbank foreign exchange market. The nationalised banks again raised selling rates of the dollar in the last session. The greenback, however, maintained a stable band for other days of the week. The demand for the greenback was steady. The dollar was also steady at its high level in the local informal market as well as in public deals, fund manager sources said.
The exchange rate of the greenback mainly moved between Tk 65.65 and Tk 65.75 adhering to previous week's range for all days save the last session. The last day trading in the inter-bank market commanded the rates between Tk 65.70 and Tk 64.75.
The total interbank spot transaction stood about 7.30 million dollar during the week against that of previous week's around 7.25 million dollar, reflecting a steady trend in demand for the greenback. The pressure on interbank market remained lower than apprehended due to use of swap facility by private sector dealer banks, they said.
The nationalised banks were the major suppliers of the dollar in the market. They raised the lower edge of the dollar in transactions as a measure for drawing increased remittance through the banking channel. The speculators could hardly influence the foreign exchange market. The stakeholders and the private sector dealer banks showed interest in abiding by the central bank's directives to sustain stability in the foreign exchange market, fund managers said.
The central bank intensified 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. It injected the dollar into the market through the nationalised commercial banks (NCBs), as a part of policy measures for indirectly maintaining reasonable flow of the greenback in the foreign exchange market.
The central bank told the dealer banks to make cautious use of the greenback in opening import letters of credit. The combined efforts of the central bank and the dealer banks helped improving the overall foreign exchange management, they said.
The inward remittance and inflow of export income ensured steady supply of the dollar in the market. The supply was the adequate to install balance between the demand for and the supply of the greenback, fund managers said.
The central bank, last week, made moderate use of its reverse repurchase agreement auction tool. It started using the tool constantly for the last several weeks to keep the local currency reasonably costly, as a measure for discouraging stakeholders to buy excess of greenback, they said.
The nationalised banks transacted the dollar predominantly at rates between Tk 65.65 and Tk 65.70 against previous week's range between Tk 65.55 and Tk 65.65. The private sector local and foreign banks made transactions of the greenback among them at rates between Tk 65.65 and Tk 65.75 in the interbank market, they added.
The dollar was traded at rates between Tk 67.50 and Tk 67.90 in the local informal market against the previous week's range between Tk 67.50 and Tk 67.80. The brokers purchased the dollar mainly at rates between Tk 67.50 and Tk 67.70 and sold it between Tk 67.80 and Tk 67.90, money dealers said.
The dollar was firm in public deals and it was traded between Tk 64.80 and Tk 66.76 against previous week's spread between Tk 64.80 and Tk 66.72.
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.
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