Taka slips further against dollar, reference rate at Tk 91.95

The dollar strengthened against the taka for the second day, setting the reference rate at Tk 91.95, after the rate was allowed to float.

That means the taka has, essentially, fallen by Tk 2.95 against the dollar since the rate controls were lifted.

The dollar was sold at Tk 91.95 to banks on Monday, said Md Serajul Islam, executive director and spokesman for Bangladesh Bank.

Bangladesh Bank made the decision to step away from a managed exchange rate and allow it to float against the dollar on Thursday. This meant that the price was left to the market to decide.

As of last Wednesday, the reference exchange rate was set at Tk 89.

On Sunday, the first day of the floating exchange rate’s introduction, the dollar rose another Tk 0.90. Bangladesh Bank sold $130 million to banks at Tk 89.90.

“On Thursday a second phase of sales was made to meet emergency demand and another $5 million was sold at a rate of Tk 91.50,” said Serajul.

This meant that the value of the dollar rose by Tk 2.05 on the first day of the floating exchange rate and the rate settled at Tk 91.50 that day. It was the largest devaluation of the taka in a single day in recent history.

“Bangladesh Bank was forced to sell dollars in an effort to balance market demand and supply,” Serajul Islam said. “Bangladesh Bank sold $10 million at a rate of Tk 91.95 to support the banks.”

On Thursday, after the decision to float the exchange rate was made, the central bank spokesman had said:

“We must allow the dollar price to be set by the open market. If we don’t, bankers say that remittances will fall.”

“Though the rate will be allowed to float, Bangladesh Bank will monitor the situation.”