The US dollar is slowly getting stronger against the local currency Taka due to the increasing trend in imports that took an upward trend in last few months.
The exchange rate of dollar rose to an average of Tk77.68 as of yesterday from Tk77.40 in the beginning of this month. The rate, however, remained stable at Tk77.40 a dollar during the last three months period due to the sluggish import growth.
In an attempt to retain the dollar rate, Bangladesh Bank had bought more than US$5bn in last year.
“Dollar rate is gaining mostly because of the ongoing increasing trend in imports,” said Kazi Sayedur Rahman, general manager of Foreign Exchange Reserve and Treasury Management Department of Bangladesh Bank.
He also blamed the importers for creating panic, which also contributed to the rise of exchange rate as they are buying more dollars unnecessary, just fearing further hike.
He, however, assured that there would be no dollar crisis as the central bank has adequate foreign currency reserve.
Foreign loan inflow, which had earlier made the dollar available in the market, has witnessed insignificant inflow in the current month. Moreover, deferred payment of LC (letter of credit) might also be increased, which could be blamed for depreciation of local currency, he said.
Kazi Sayedur Rahman, who termed the process to retain the exchange rate by buying dollar was abnormal, said: “Rather, the market is now behaving normally with fluctuation in the exchange rate but Bangladesh Bank kept the rate stable artificially by buying dollars and that behavior was abnormal.”
The import was 11.61% negative in July this year compared to same months in the previous year.
The growth turned to positive from August with 43.70% rise in import compared to the same months of the last year and continued to increase till now, according to the Bangladesh Bank data.
BB data shows that the LC settlement value was lower than the opening value in July. But in the recent months, LC settlement value turned to higher than that of opening value.
The import expenditure value basis on LC settlement was
$2.8bn while LC opening value was $3.4bn in July this year. The LC settlement value stood at $3.3bn in August while LC opening value at $3.2bn.