POBNEWS24, Dec 29, 2023 : The central bank — Bangladesh Bank — is purchasing dollars from other banks to boost its foreign exchange reserves, aiming to meet the requirements of the International Monetary Fund’s (IMF) loan scheme.
Despite a severe dollar crisis in the currency market, some commercial banks are selling dollars to the central bank at a loss, after acquiring expatriate incomes at a premium, according to sources.
Commercial banks are now purchasing expatriate and export earnings at Tk 109.5 per dollar. The official rate for selling dollars to importers is Tk 110, but the banks are charging more than the fixed price.
With a 2.5 per cent incentive, public and private banks are currently purchasing expatriate incomes at Tk 112 per dollar. Even some Shariah-based and conventional banks are reportedly acquiring expatriate incomes at Tk 123 per dollar, yet selling them to the central bank at a reduced rate.
In this regard, Md Mezbaul Haque, the spokesperson for Bangladesh Bank, said trading dollars is a routine work of the central bank. They are buying dollars at market prices from the banks with expatriate income and surplus reserves. Besides, the funds cleared by different donor organisations and projects this month have contributed to the increase in the dollar reserve.
“The forex reserves are now close to the target set by the IMF. It will be known by Sunday where the reserves now stand, whether the target is achieved,” he added.
The central bank reported forex reserves of $25.02 billion on 30 November, but it reduced to $19.40 billion as per the IMF’s BPM6 accounting system. After dipping to $24.66 billion on 7 December, and to $24.62 billion on 14 December, the forex reserves returned to the gaining streak and rose to $26.04 billion on Wednesday. The figure shrinks to $20.68 billion if the IMF prescribed method is applied.
The growth came following the release of an IMF loan installment, budget support from the Asian Development Bank (ADB), and fund disbursements from different projects.
As per IMF conditions, the central bank must maintain a net reserve of $17.78 billion at the end of December, while the metric was at slightly higher than $16 billion on Wednesday.
To meet the reserve target, Bangladesh Bank purchased more than $200 million from several banks on Thursday. The central bank is even planning to boost the reserves further by purchasing dollars held by banks as payment for foreign currency liabilities.
An official from the central bank told this Correspondent that there have been utmost efforts to fulfill the reserve target on time. If the target is not met, there will not be a far distance.
