The US dollar has lost over 5 percent in value against the Bangladesh taka over the two years in spite of the central bank's greenback buying spree to keep the exchange rate stable.
The inter-bank dollar-taka exchange rate stood at Tk 77.65 yesterday, down from Tk 81.85 exactly two years ago, according to data from Bangladesh Bank.
Analysts and bankers said if the central bank had not purchased the greenback, its price could have gone down to around Tk 75 a dollar, as demand for the foreign currency has been on a declining trend for the past one and a half years. Demand for the dollar is still low against the supply, said a treasury official of a private bank asking not to be named.
Though import is growing slowly, exports and remittances are growing at modest rates, making the supply of the greenback abundant, he added. “If imports continue to slide down, how long will Bangladesh Bank be able to keep the exchange rate at this level?” said Monzur Hossain, senior research fellow of Bangladesh Institute of Development Studies.
While he acknowledged that central bank's excessive intervention has kept the exchange rate from becoming volatile, he advised BB to ease off its buying spree.
BB purchased nearly $9 billion from banks between July 1, 2012 and May 7, 2014, and did not sell any dollar to banks during the period.