Central Bank Returns to Market With Fresh Dollar Sale to Steady the Taka

Bangladesh Bank has stepped into the foreign-exchange market once more, selling a fresh tranche of dollars from its reserves in an effort to slow the recent rise in the greenback's value against the local currency. Market participants indicated that the central bank initially put up roughly $100 million through an auction and ultimately sold between $100 million and $120 million after commercial banks showed stronger demand than anticipated.

The dollars were sold at rates clustered between Tk 124.30 and Tk 124.35. Bankers described this range as close to prevailing interbank levels, suggesting the central bank was trying to meet market demand without sharply undercutting the rate that banks were already trading among themselves. The intervention follows a similar sale of about $122 million the previous week, marking a short series of moves after a prolonged period in which the central bank had largely stayed out of the market.

The immediate trigger for the latest sale appears to be a spike in demand for dollars linked to import payments. Large letters of credit opened for fuel and other government-related purchases have added pressure, as oil and energy imports continue to require substantial foreign currency. Traders noted that the dollar had been edging higher in recent sessions, with some banks buying from remittance houses at rates above the level at which the central bank was willing to sell. By injecting dollars through the auction, Bangladesh Bank aimed to increase short-term supply and prevent a sharper or more disorderly climb in the exchange rate.

Foreign-exchange reserves stood near $36.4 billion after the transaction. That level is lower than the peaks above $37 billion recorded earlier in the year, though it remains well above the lows seen in late 2024. The modest decline from the sale is not large relative to the overall stock, yet repeated interventions of this size will gradually draw down the buffer if import demand stays elevated and inflows do not accelerate in tandem.

For importers, particularly those bringing in fuel, fertiliser, and industrial raw materials, a more stable exchange rate reduces the risk of sudden cost spikes. At the same time, the fact that the central bank felt the need to sell dollars again signals that underlying demand for foreign currency has not yet eased. Exporters and remittance recipients, meanwhile, continue to watch the rate closely; a stronger dollar improves their taka earnings, but excessive volatility makes planning harder for both sides of the trade.

Bankers said the auction provided temporary relief, yet they cautioned that the pressure linked to energy imports is unlikely to disappear quickly. If government and private-sector letter-of-credit payments remain heavy through the middle of the month, further demand for dollars is expected. In that environment, the central bank's willingness to sell from reserves may continue to act as a backstop, but it also underscores the ongoing challenge of balancing market stability with the need to preserve foreign-currency buffers.

The episode fits a broader pattern in which Bangladesh's external accounts have shown mixed signals. Remittance inflows have been relatively supportive, and overall reserves have recovered from earlier lows, yet import bills—especially for fuel—can still create short-term spikes in dollar demand. How long the current pressure persists will depend on the pace of those payments, the behaviour of the interbank market in the days ahead, and whether inflows from remittances and exports can offset the outflow without further central-bank sales.