US dollar more expensive against taka

The US dollar became more costlier yesterday as the local currency depreciated once again in the inter-bank platform. 

The exchange rate stood at Tk 93.45 per dollar on Tuesday in contrast to Tk 92.95 on Monday. It was Tk 84.82 on June 28 last year.

In order to prevent a massive fall of the taka, Bangladesh Bank injected $42 million into the market yesterday to help banks settle import bills, said a central bank official.

The central bank supplied a record $7.47 billion to the market between July 1 and June 28 this fiscal year. However, the inter-bank exchange rate set by the central bank has been unable to offset the ongoing volatility due to the inadequate supply of the greenback.

The foreign exchange market is facing a shortage of US dollars due to soaring import payments and declining remittance inflows.

The country's import payments have shot up since the end of last year because of the rising prices of commodities in the global market.

Between July and April, imports went up by 41 per cent to $68.66 billion, while exports grew 35 per cent to $41 billion.

This resulted in a record trade deficit -- the gap between exports and imports -- of $27.56 billion, up 53 per cent year-on-year. Inflow of remittance, the cheapest source of foreign currencies for Bangladesh, fell 16 per cent year-on-year to $19.2 billion in the first 11 months of the fiscal year.

All these led to the decline in the foreign exchange reserves to $41.7 billion as of June 28, whereas it was $46.15 billion on December 31.

Bangladesh Bank had decided on June 2 to allow the exchange rate of the taka to float against the US dollar but recently backtracked from its stance, causing the forex market to become volatile again. Volatility in the country's foreign exchange market intensified after the central bank commenced setting the exchange rate of the taka against the US dollar.