Central Bank Releases Fresh Dollars as Taka Faces Renewed Import-Driven Strain

Bangladesh Bank has again stepped into the foreign exchange market, selling $20 million from its reserves to commercial banks in an attempt to slow the dollar's climb. The intervention, completed earlier this week, was triggered when the rate moved close to Tk 124, a level officials appear reluctant to see crossed.

The dollars were sold at Tk 123.65 each. That price sits 85 paisa above the rate at the central bank's previous sale this fiscal year, when it released $11.5 million on 14 September at Tk 122.80. The higher selling rate reflects the gradual firming of the currency over recent weeks, during which the dollar has been edging upward by roughly 10 paisa a day.

Market sources say the latest sale was intended to add supply at a moment of rising demand rather than to reverse the trend outright. By the close of the trading day the rate had not fallen back. Banks continued to purchase dollars from exchange houses at levels around Tk 123.70, indicating that the additional $20 million was not large enough to absorb the full volume of demand.

Much of that demand is linked to higher import costs, particularly for fuel. Letters of credit for petroleum products have expanded sharply in the current fiscal year as global energy prices remain elevated amid ongoing tensions in the Middle East. Importers of other goods have also faced higher dollar requirements, adding to the pressure on the interbank market.

This is only the second time in FY2026-27 that Bangladesh Bank has sold dollars from its reserves. After a prolonged period in which the central bank largely stayed on the sidelines, the two sales signal a willingness to intervene when the rate approaches a threshold officials consider sensitive. Crossing Tk 124, they have noted, would raise the local-currency cost of imports and could feed into already elevated inflation.

At the same time, the country's overall external position has been supported by strong remittance inflows. Expatriate transfers have remained robust through the first half of October, helping keep gross reserves in the mid-$36 billion range and BPM6 usable reserves near $31 billion. Those inflows provide a buffer, yet they have not fully offset the dollar demand generated by costlier energy imports.Commercial bankers described the intervention as modest in scale. With the dollar continuing to firm even after the sale, some participants expect the central bank may need to act again if demand does not ease. Others note that limited sales at rising rates can themselves signal that the currency is under pressure, potentially encouraging further buying.

For importers, the gradual rise in the exchange rate increases the cost of opening letters of credit and settling obligations. For exporters, a moderately weaker taka can improve competitiveness, though any sharp or disorderly movement risks unsettling business planning. The central bank's approach so far has been to smooth the rise rather than attempt a sharp reversal.

The timing of the sale also coincides with a multi-day bank holiday for Durga Puja, during which interbank trading is paused. Limited services remain available at ports and customs stations so that essential trade can continue, but the broader market will not resume normal activity until after the holiday period ends. How the rate behaves once full trading returns will depend on whether import demand stays elevated and whether remittance flows continue at their recent pace.

Bangladesh Bank has not indicated the size or timing of any further intervention. Its public stance remains focused on preventing an abrupt move beyond Tk 124 while relying on underlying remittance strength and any future moderation in energy prices to ease longer-term pressure. For now, the $20 million sale stands as a measured attempt to buy time rather than a decisive shift in the currency's trajectory.