BB gives banks another $40m

Bangladesh Bank yesterday injected $40 million into banks operating in the country in a bid to ensure stability in the local foreign exchange market.

With this move, the central bank has injected about $1,200 million into the market in the last 34 days. It had supplied a record $7.62 billion in the last fiscal year to reduce the depreciation of the taka against the US greenback.

Md Serajul Islam, spokesperson of Bangladesh Bank, said the central bank took this decision as a part of its efforts to calm the market down.

The exchange rate of the taka stood at Tk 94.70 per dollar in the interbank platform in contrast to Tk 84.80 a year ago.

A managing director of a bank, on condition of anonymity, said the interbank exchange rate does not reflect the actual scenario of the market as many banks are now selling greenbacks quoting up to Tk 110.

As per banking norms, banks are allowed to sell dollars to importers by adding a maximum of Tk 1 to the interbank rate, he said.

This means importers are supposed to spend a maximum of $95.70 per dollar to settle their import bills.

He said the central bank has kept the exchange rate of the interbank high artificially by giving verbal instructions to banks.

The lower rate in the interbank platform than the actual one followed by the market has discouraged banks not to sell and buy any dollars among each other.

With this backdrop, the interbank platform has turned inoperative, which has fuelled volatility further in the foreign exchange market, the managing director said.