Central bank steps up dollar purchases to prevent rate drop amid remittance surge

Bangladesh Bank buys another $100 million from six commercial banks on Thursday

In a bid to halt a potential drop in the price of the greenback, Bangladesh Bank (BB) is purchasing US dollars from commercial banks on a daily basis, driven by a sharp influx of remittances ahead of Eid-ul-Azha and sluggish import demands.

On Thursday, the final trading day of the week, the central bank snapped up another $100 million from six commercial banks through an auction at a fixed rate of Tk 122.75 per dollar.

With the latest intervention, the BB’s total dollar purchases reached $255 million across four consecutive days this week.

Prior to Thursday's move, the BB bought $70 million from four banks at the same rate on Wednesday, following purchases of $85 million on Tuesday and $100 million on Monday.

This matches a similar streak from the previous week when the central bank bought dollars for four straight days from Monday to Thursday.

Arief Hossain Khan, executive director of BB, confirmed that the continuous market intervention is aimed at keeping the exchange rate stable.

The supply of dollars in the banking channels has increased significantly due to a "surge" in inward remittances sent by expatriates ahead of the upcoming Eid-ul-Azha.

The surge also also resulted from a drop in demand for foreign currency due to a fall in overall imports.

So far in May, the central bank has accumulated $565 million from the market, compared with $180 million purchased throughout the entire month of April.

With these latest figures, the aggregate amount of foreign currency bought by the BB in the current 2025-26 fiscal year has reached a staggering $6.24 billion.

The central bank initiated this competitive auction format on Jul 13 last year to manage volatility and stabilise the currency after transitioning toward a market-based exchange rate system.

Aside from a brief six-week hiatus between Mar 3 and Apr 15, during which no foreign currency was bought, the BB has been aggressively mopping up excess dollars.

Earlier this year, the central bank recorded massive monthly purchases, picking up $1.53 billion in February, $798 million in January, and $1.09 billion in December last year.