Taka strengthens against dollar

FT ONLINE

The local currency appreciated by two paisa against US dollar on Wednesday after nearly three years in the inter-bank foreign exchange (forex) market.

Dollar was quoted at Tk 84.88 per unit on the day against Tk 84.90 of the previous working day, according to market operators.

"The deals were settled at Tk 84.88 on the day in the inter-bank forex market," said a senior official of the Bangladesh Bank (BB).

Explaining the overall forex market situation, he said the exchange of taka against dollar has been fixed in line with the market requirement.

"The demand for dollar decreased slightly following a higher inflow of remittance and lower import payment obligations recently," the central banker said.

Bangladesh received more than $1.0 billion in remittance in the first 17 days of this month, according to another BB official.

He expected that remittance inflow would cross $1.7 billion by the end of December.

The influx has witnessed an uptrend in recent months as the government started incentivizing the beneficiaries against inward remittance.

BB data shows remittance inflow rose by 22.57 percent to $7.71 billion from July to November of the fiscal year 2020 from $6.29 billion in the same period last year.

On the other hand, import expenses maintained a falling trend in recent months mainly due to lower imports of food grains and capital machinery, according to the BB officials.

"Currently, petroleum products like LNG and intermediate goods are now dominating the country's overall import," the central banker noted.

The country's overall import fell by more than 3.0 percent to $18.14 billion from July to October of FY '20 from last fiscal's $18.73 billion in the same period.

A senior treasury official of a leading private commercial bank said the existing appreciating mode of taka against dollar may continue if higher inflow continues in the near future.

"The strength of BDT against the US dollar may increase further if the ongoing lower import payment obligations continue in the coming days," he spelled out.

Market indicators suggest no possibility of taka's depreciation against dollar suddenly in a bigger way, he said in reply to a query.

On December 27, 2016, taka appreciated by 10 paisa against dollar in the forex market.

Dollar was quoted at Tk 78.70-78.80 on the day in question against Tk 78.80 of the previous working day.