BB’s dollar purchase nears $5 billion

The Bangladesh Bank has continued to set record in purchasing US dollar as it bought greenbacks worth $4.93 billion from the commercial banks between July 1 and May 22 of this financial year.
Before the FY 2012-13, the BB purchased the
highest amount of greenbacks worth $2.16 billion in the FY 2009-10, the central bank statistics showed.
BB officials told New Age that the central bank had no option but to purchase greenbacks due to a poor business environment in the country and a continuous devaluation of the dollar against the local currency taka.
They feared that such type of BB initiative
would push up the inflation although the central bank was giving government securities and BB bills (central bank securities) instead of cash to the commercial banks in exchange of the dollar purchase.
The dollar purchase by the BB may increase the inflation rate when the securities will be matured, they said.
The central bank has also failed to stop
the devaluation of the US dollar against the taka, they said.
The BB has already bought dollars worth $206 million this month from the commercial banks. Of the amount, dollars worth $18 million were purchased on May 20, $40 million on May 16, $13 million on May 14, $55 million on May 13, $8 million on May 9, $63 million on May 8 and $9 million on May 2, the central bank data showed.
According to the BB record book, the central bank bought dollars worth $4.93 billion in the
first 10 months and 22 days of the current fiscal year, highest since the FY 2004-05.
It is not possible to collect the data beyond the FY 2004-05 as the information are not available in the BB record book.
The BB purchased dollars worth $157 million in FY 2011-12, $316.50 million in FY 2010-11 and $1,484.20 million in FY 2008-09.
A BB official said that the purchase of dollars by the central bank would not put any positive impact on the macro-economic situation of the country as the greenbacks were not being invested in the productive sector.
Majority of the commercial banks are now enjoying available greenbacks due to lower import growth and higher inflow of remittances, he said.
‘Under the circumstances, lower demand for and higher supply of the dollars in the local market have continued to push the BB to purchase greenbacks,’ he said.
‘For this reason, the country’s foreign exchange reserve recently crossed $15-billion mark, but it stood $14.46 billion on Wednesday due to an import bill payment made by the government to the Asian Clearing Union this month,’ he said.
Another BB official said that the central bank had taken the initiative of purchasing greenbacks to maintain a standard rate between the dollar and the taka so that the expatriate Bangladeshis felt encouraged to remit more to the country and the interest of the local exporters could be protected.
The BB data, however, showed that the dollar continued to depreciate against the taka frequently.
The dollar was quoted at Tk 77.80 in the inter-bank forex market on May 22 against Tk 77.93 to Tk 77.94 on May 2 and it was quoted at Tk 79.75 to Tk 79.80 on January 1, 2013.
The greenback depreciated by 4.98 per cent against the taka in the last one year as the indicative selling rate of dollar stood at Tk 77.80 on May 22 coming down from Tk 81.88 on May 22, 2012.
The dollar earlier appreciated by 19.29 per cent against the local
currency as the indicative selling rate of dollar
stood at Tk 84.45 on January 29, 2012 up from Tk 70.79 on January 2, 2011 due to a higher import payment.

-With New Age input

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