Dollar remains stable as BB adopts market-based rate

The US dollar rate remained stable yesterday although Bangladesh adopted a market-based exchange rate regime the day before, giving some relief to businesses and importers.

The dollar rate, which has hovered between Tk 122 and Tk 122.50 for the past few months, did not change after the market-based exchange rate was introduced.

The move to a more flexible, market-oriented exchange rate system was made to ease pressure on foreign exchange reserves and meet a key condition tied to a $4.7 billion loan programme with the International Monetary Fund.

On May 14, the central bank lifted the Tk 1 spread between buying and selling rates of the US dollar by repealing a directive issued in January.

At the same time, it reinstated a circular issued in December 2024, allowing banks to "freely" negotiate the US dollar rate for both interbank and customer transactions.

That marked a formal return to a pricing framework driven by demand and supply.

Bankers say that banks are expected to have an adequate supply of dollars due to increased remittance inflows ahead of Eid-ul-Azha.

A treasury head of a private bank, speaking on condition of anonymity, said that the central bank and other authorities have instructed everyone to play a sensible role in the current situation.

Since Eid-ul-Azha is approaching, dollar flow is expected to increase. There is confidence among all parties regarding this, so there is no volatility in the market, the official said, opining that there will be no volatility in the country's dollar market in the coming days.

Over the past 15 days, the US dollar has been bought at Tk 121 to Tk 122 and sold at Tk 122.30 to Tk 122.50, he added.

At an event yesterday, Bangladesh Bank Deputy Governor Md Habibur Rahman said that if the rate rises beyond the desired level, Bangladesh Bank will intervene, and they have the tools to do so.

Although the taka's exchange rate fluctuated slightly on Wednesday after moving to a market-based dollar rate, there was no significant depreciation, he added.

In other words, there was no pressure for devaluation. The situation will be monitored for another day or two, he said.

"Then it will become clear what will happen. It appears that a good balance has been established between the demand and supply of foreign currency. As a result, there will be no unwanted depreciation or pressure on the taka's exchange rate," he said.