Bankers today decided to cut the buying and the selling rates of the US dollar by Tk 0.25 as Bangladesh's foreign currency reserves received a fillip after the International Monetary Fund (IMF) approved the second instalment of its $4.7 billion loan.

This is the third time in three weeks banks have raised the rate of the local currency against the US dollar, reversing the trend that saw the greenback surge against the taka by nearly 30 percent in two years.

Now, banks will buy US dollars at Tk 109.5 from exporters and sell them at Tk 110, Md Afzal Karim, chairman of the Bangladesh Foreign Exchange Dealers' Association (Bafeda), told The Daily Star.

He spoke after a virtual meeting of the Bafeda and the Association of Bankers, Bangladesh (ABB) where the rate was fixed. The new rate will be effective from Sunday, he said.

Yesterday, the IMF approved $689 million in the second instalment of the loan for Bangladesh. In the first tranche, it released $447.8 million on February 2 this year.