The central bank purchased $7.68 billion from the banking system in the first 11 months of the current fiscal year, the highest on record, to contain any abnormal appreciation of the local currency.
The previous highest was posted in 2013-14 when Bangladesh Bank bought $5.15 billion.
The regulator was forced to smash the previous record between July and May because of a higher flow of remittance and lower imports caused by the business slowdown amid the coronavirus pandemic.
The central bank needs to continue the intervention until the economy recovers from the slowdown, analysts and businesspeople say.
The US dollar purchase is helping the export sector as local products become cheaper in foreign markets. It is also swelling the foreign exchange reserves. But it has flooded the financial sector with excess liquidity.
But a lower credit demand has adversely impacted the cost of funds for banks as liquidity has largely remained idle. The excess liquidity in the banking industry stood at around Tk 200,000 crore in April.
Despite the massive dollar purchase, the central bank has failed to devalue the taka against the US currency.
Since July, the central bank has been intervening in the foreign exchange market after the local currency began strengthening.
The interbank exchange rate has been hovering around Tk 84.80 per USD since July. The rate was Tk 84.95 on June 2 last year.
Had the central bank had not intervened in the exchange market, local currency would have appreciated.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said the central bank's stance in purchasing the dollar was appropriate to contain the appreciation of the local currency.
"The central bank has to maintain the intervention until normalcy returns."
The intervention means Bangladesh will have more dollars than required during the pandemic.
The current business slump might continue until the end of the next fiscal year, given the weak vaccination programme, said Mansur, also a former official of the International Monetary Fund.
Although import payments have recently gone up to some extent due to the price hike in the global commodity market, this has not positively impacted the investment sector.
The volume of the imported products has not increased significantly, he said.
"The central bank's intervention is time-befitting as it is playing a strong role in protecting the interest of exporters from the slowdown," said Kutubuddin Ahmed, chairman of Envoy Group, a garment exporter.
Despite Bangladesh Bank's move, the exchange rate of the taka is still comparatively stronger than those in peer nations. For instance, the currencies of India, Sri Lanka and Pakistan fell against the US dollar earlier.
"So, we are facing a competitiveness crisis due to a stronger taka. The authorities should give more efforts to devalue the local currency in the coming days to shield the interest of exporters."
Md Arfan Ali, managing director of Bank Asia, said Bangladesh would continue enjoying the excess dollar in the coming days due to the higher flow of remittance.
Between July and May, Bangladesh received $22.8 billion in remittance, already the highest in a single year.
The pile-up of US dollars will help the country to a large extent when imports start picking up.
Foreign reserves stood at $45.08 billion on June 2, up 34.70 per cent year-on-year.