Taka keeps appreciating against dollar

July 28, 2014

Export, remittance may take hit
The US dollar continues to depreciate against the Bangladeshi currency taka in the current month of July as the expatriate Bangladeshis are now sending robust amount of greenback to their relatives ahead of Eid-ul-Fitr. The central bank has already purchased US dollar worth $483 million from the local scheduled banks to keep stable the exchange rate of the taka against the greenback, but its effort has virtually failed due to higher export earnings against the lower import payments, a BB official told New Age on Sunday.
The BB data showed that the dollar depreciated continuously this month as it was quoted (buy-sales) at Tk 77.52-Tk 77.54 on July 24, at Tk 77.54-Tk 77.55 on July 23, at Tk 77.54-Tk 77.54 on July 22 and Tk 77.55-Tk 77.58 on July 21.
The expatriate Bangladeshis remitted $936.63 million in the first 18 days of July ahead of Eid-ul-Fitr which made volatile the exchange rate of the dollar against the taka.
The official said the depreciation of the dollar had already put a negative impact on the country’s export sector and it would put an adverse impact on the inward inflow of remittance in the coming months.
The dollar started to depreciate against the taka from February 26 this year after a steady run in the previous nine months as the demand for greenback declined significantly in the local market amid sluggish business due to political unrest and steady growth in inward remittance in the second half of the FY14.
The BB data showed that the dollar was quoted at Tk 77.75-Tk 77.74 on February 26 from Tk 77.75-Tk 77.75 on February 25.
The dollar might have declined more in the last few months if the central bank did not purchase the greenbacks from the market, the BB official said.
The central bank purchased dollar worth $35 million on July 24, $110 million on July 21, $65 million on July 17, $118 million on July 15, $20 million on July 13 and $135 million on July 10.
The dollar price had increased to Tk 84.45 on January 29, 2012, according to the BB data.
From January 29, 2012 to May 30, 2013, the price of dollar against the taka continuously declined.
After the period, the BB was able to keep the dollar price stable as it had purchased huge amount of greenback, the BB official said.
He said, ‘A number of scheduled banks are now keeping excess greenback as the country posted a satisfactory export growth against a lower import payments in recent months.’
For this reason, the central bank purchased the dollar worth $5.15 billion in FY14 and $4.53 billion in the FY13.
The country’s foreign exchange reserve stood at $21.47 billion on July 22 due to the central bank’s dollar purchasing spree in the last two financial years.
After the BB had bought a huge amount of dollar last financial year, the taka remained stable at around 77.75 a dollar between May 2013 and February 2014.
BB governor Atiur Rahman told reporters at the monetary policy unveiling session on Saturday that exchange rate of the taka against the dollar continued to face a pressure due to a lower import payment against a higher growth of export earnings and steady growth in inward remittance.
The BB will continue its dollar purchasing from the local market in the coming months to keep stable the exchange rate between the dollar and the taka, he said.

-With New Age input

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