Dull import growth pushes BB to buy dollar

Bangladesh Bank purchased the dollar worth $510 million in first 19 days of this month as most of the scheduled banks are now holding good amount of greenback amid stagnant business situation in the country due to the ongoing political unrest.
A BB official told New Age on Thursday that the central bank had been compelled to purchase a record amount of dollar in the recent years due to lower import growth and increased inflow of inward remittance and the situation remained same in March.
The country has been facing political unrest and uncertainty for a long period that foiled the business momentum resulting that the banks were forced to hold huge amount of the greenback, he said.
The official said the BB had mainly taken the move with a view to preventing depreciation of greenback against the local currency taka.
Bangladesh received inward remittance worth $657.82 million between March 1 and March 13 of this year from Bangladeshi workers abroad, according to the central bank’s latest statistics.
The remittances from the Bangladeshi nationals working abroad were estimated at $1.18 billion in February and $1.24 billion in January of this year.
Besides, lower import payment amid political unrest also played a significant role in holding available foreign exchanges by the banks this month.
The BB resumed purchasing greenback from the banks on January 12, 2015 after around three months because of lower demand for the dollar in the market.
After starting the purchase of the US dollar, the central bank bought $224 million from the banks in January. It was $304 million in February 2015.
The BB has so far purchased greenback worth $2.42 billion between July 1 and March 19 of this financial year, the BB data showed.
The central bank will have to continue to purchase the greenback if the existing political unrest persists in the months to come, the BB official said.
The businesspeople has adopted a ‘go-slow’ policy to expand their business due to the existing political crisis which has ultimately compelled the central bank to purchase the greenback from the banks in the interest of keeping the exchange rate of the taka against the greenback stable, he said.
Due to the central bank initiative, the dollar became stable at around Tk 77.80 in the last two months, the BB data showed.
Bangladesh Bank purchased a record amount of dollar — worth $5.15 billion — from the banks in the FY14 while it purchased $4.53 billion in the FY13.
Due to the dollar purchasing spree by the BB, the country’s foreign exchange reserve increased significantly in the last two years.
The reserves crossed $15-billion mark on May 7, 2013, $16-billion mark on August 13, $17-billion mark on October 22, $18-billion mark on December 19, $19-billion mark on February 19, 2014, $20-billion mark on April 10, $21-billion mark on June 16, $22-billion mark on August 7 and $23-billion mark on February 26 of this year.