The country’s foreign exchange reserve crossed US$ 26 billion mark for the first time as Bangladesh Bank’s purchase of US dollars from local banks surpassed US$ 1.14 billion between July 1 and August 17 of this financial year amid sluggish business activities.
A BB official said that the reserve stood at US$ 26.03 billion on Monday as the BB kept intervening into the foreign exchange market so that the Taka remained stable against the dollar amid lack of demand for the greenbacks.
The central bank purchased greenbacks worth US$ 26 million from the local banks on Monday, taking the total dollar purchase to US$ 1.14 billion between July 1 and August 17 of the FY2015-16.
The reserve had crossed US$ 25 billion mark on June 25, this year. The demand for dollars continued to be sluggish for the last few months as the business activities were yet to pick up after months of political unrest and uncertainty, a BB official said.
BB general manager Kazi Sayedur Rahman told New Age on Monday that a slide in import payment in the last few months due to lower prices of petroleum and major commodity products in the global market had helped increase circulation
of dollars in the country.
Besides, the inward remittance and foreign direct investment in the recent months also fuelled the circulation of dollar which played a role in raising the country’s foreign exchange reserve, he said.
Former interim government finance adviser Mirza Azizul Islam earlier told New Age that ‘big-but-idle’ foreign exchange reserves would not bring any positive impact on the economy.
‘So, there is no scope to be happy due to the large amount of reserve as such type of idle asset is rather a burden for the developing countries like Bangladesh,’ he said.
The central bank has been continuously purchasing greenbacks from the banks which are facing lower demand due to sluggish business, he said.
The BB purchased greenbacks worth around US$ 13.44 billion from the local banks between FY13 and FY15 to keep the Taka stable against the dollar, he said.
Former BB governor Salehuddin Ahmed said that the government should take initiative to strengthen the country’s business capability so that the financial sector utilises the idle greenbacks in the productive sectors.
Otherwise, the BB would be forced to continue to purchase the dollar to manage exchange rate between Taka and dollar.
The exchange rate of US dollar has remained stable at around Tk 77.80 in the inter-bank forex market in the last few months due to the central bank’s repeated intervention.
Data showed that the central bank had purchased US$ 3.76 billion in the FY15, US$ 5.15 billion in FY14 and US$ 4.53 billion in FY13 from the scheduled banks.
Source: New Age