STAR BUSINESS REPORT

The Bangladesh Bank (BB) yesterday bought record $265 million from 17 banks in a single day, taking its purchases so far this fiscal year to about $1.34 billion.

The move is a part of the BB’s efforts to contain the depreciation of the US dollar against the local currency taka.

For the auction, the central bank set a cut-off rate of Tk 121.75. Twenty banks submitted bids, and 17 of them sold dollars, BB officials said. Islami Bank Bangladesh accounted for the largest share by selling $100 million.

In the interbank market on Tuesday, the dollar traded between Tk 121.69 and Tk 121.76.

The central bank has bought more than $1 billion from commercial banks since mid-July, reversing its earlier strategy of selling dollars to slow the taka’s fall and support state agencies paying import bills.

Stronger remittances and exports, together with the central bank’s buying spree, have helped lift the country’s foreign exchange reserve.

On August 28, the forex reserve stood at $26.19 billion, up from $20.59 billion a year earlier, according to BB.

In the past three years till FY25, BB sold more than $25 billion from its foreign exchange reserve to pay for fuel, fertiliser and food imports.

But after the Awami League-led government was ousted in August last year in a mass uprising, the central bank suspended dollar sales for government imports, citing depleted reserves.

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said, “We are seeing that the central bank is trying to keep the dollar rate within Tk 121.50 to Tk 122.50.”

The economist said demand for dollars is now weak, and without the intervention of the BB, the rate would have fallen.

“They [BB] are not allowing the rate to decline because remittances and exports could be discouraged,” he added.

In an interview, BB Governor Ahsan H Mansur said their target is to raise the forex reserve to $40 billion. That means once BB reaches that