Local Market

Last week, the demand for US dollar was moderate in the local forex market. Slight increased inward remittances and lower demand from the importers than previous week kept dollar demand moderate in the market. During the week, dollar ranged between BDT 48.6500 and BDT 48.6520. Banks sold a unit of US dollar to the importers at 48.7550 and bought a unit of dollar from the exporters at Tk 48.1550. The daily average forex turnover was US dollar 46 million (Source: BAFEDA).

Bangladesh Bank accepted treasury bills worth Tk 529.50 crore at Sunday's auction (Tk 509 crore for 28-day @8.16 per cent and Tk ,20.50 crore-for 91 days @ 8.95 :per cent. On tl»e other hand, treasury bill?, worth BDT 511 crore matured on Monday. This mismatch drove the call money rate a bit up bn Monday last and the rate ranged between 7 and 8.5 per cent. In the kerb market, cash US dollar traded between BDT 48.75 and 49.00. The local forex and money markets will resume on Sunday next but the full-day strike called by the oppositions may hamper smooth transactions.

International Market

Dollar remained ranged-bound in the international forex market. The main focus was on Bank of England's decision to cut the Interest rates. The bank cut the key rate by 0.5 per cent from 6.75 per cent to 6.25 per cent. This was the third month in a row the central bank cut its rate to lower borrowing costs. But sterling extended its gain against dollar with the rally of equity markets and the rate was already factored in the market’

But the pressure remained on dollar with the down trend of the Wall Street and concerns over possible impeachment of US President Bill Clinton. Dollar fell heavily against yen on comments of Japanese finance minister, who said that the market seemed to be comfortable with the dollar pagged at 110-120 yen. It forced the fund operators to go for dollar sales. Deutsche mark (DEM) also maintained its firm tone against dollar. However, dealers expected the market to remain thin and ranged-bound ahead of the year end and launch of Euro with the beginning of the next year.

During the week, US dollar traded at between 116.70 at 120.70 against yen. 1.6490 and 1.6750 against DEM and GBP traded at rates between 1.6468 and 1.6740 against USD.

— StanChart Bank