Dollar Passes Tk 124 as Bangladesh Bank Sells Reserves to Steady the Market

Bangladesh Bank has turned to selling dollars as pressure on the taka builds. At an auction on 4 November it sold dollars from its reserves to commercial banks at Tk 124.30 to Tk 124.35 each. The Business Standard put the sale at $120 million, an initial $100 million offer plus $20 million added because of bank demand, while The Daily Star reported $100 million. A $100 million auction called on 3 November had been withdrawn, and The Daily Star said a $122 million auction the week before was the first of its kind in a long while.

The interbank rate has been moving quickly. According to The Daily Star, the dollar was at Tk 123 at the start of October and Tk 123.99 on the last working day of the month, before reaching Tk 124.35. For about a year and a half after August 2024 it stayed between Tk 121 and Tk 122.30, and it has been rising since March.

What is driving it

The Daily Star linked the pressure to rising import costs, especially fuel, while The Business Standard pointed to demand from government letter of credit payments in October. A central bank official told The Daily Star that oil and dollar prices fell globally on 4 November and that he expected Bangladesh's situation to improve too.

Reserves after the ACU bill

The auction was followed by a $1.64 billion payment to the Asian Clearing Union, the regional arrangement through which member countries settle trade bills. The Business Standard reported that reserves fell to about $29.99 billion under the IMF's BPM6 method, from about $31.51 billion. Gross reserves, a different and higher measure, were reported at about $34.9 billion, down from about $36.4 billion.

Why it matters for professionals

A weaker taka raises the local cost of imported fuel, raw materials and machinery, so treasury, procurement and trade-finance teams tend to feel it first in LC pricing and supplier quotes. Exporters and people receiving remittances get more taka per dollar, though dearer imported inputs can offset part of that gain. Budgets built on last year's Tk 122 range may need another look.

What to watch next

• Whether Bangladesh Bank keeps selling dollars, and at what rate
• Fuel import bills and global oil prices
• Where reserves settle on the BPM6 measure after the ACU payment

Sources

• The Daily Star
• The Business Standard (auction)
• The Business Standard (reserves)
• Daily Waadaa

Cover photo: Bangladesh Bank Main Building by Mrb Rafi / Wikimedia Commons, cropped (CC BY-SA 4.0)