The Bangladesh Bank has resumed purchasing of the US dollars from the local market after three years with a view to keeping the prices of the greenbacks stable amid a fall in import payments in the wake of coronavirus. The supply of the US dollars in the country’s local market has surged in recent months due mainly to the fall in import payments against the growing volume of remittance inflow. In the context of the identification of three coronavirus infected individuals in the country on Sunday, appreciation of the taka against the US dollar could be another disappointment for the exporters. The central bank for the last time purchased the dollars from the local market on January 4, 2017 and since then it has been injecting the US dollars in the local market. In FY20, the BB sold $489 million to the local market till Sunday after selling $2.34 billion in FY19. The higher supply could have resulted in a devaluation of the currency in the local market, BB officials said. The interbank exchange rate of the dollar was Tk 84.95 on Tuesday, according to the BB data. As banks are holding surplus US dollars, they rushed to the BB to sell the greenbacks. On Monday, the BB purchased $130 million from the local market and another $22 million on Tuesday, BB officials said. Although the country’s export earnings dropped by 5.31 per cent in the first seven months (July-January) of the current fiscal year 2019-2020, the growing volume of remittance and the shrinking import payments have turned the country’s overall balance surplus. In July-January of FY20, the country’s overall balance turned $132 million surplus against $975 million deficit in the same period of FY19. Only in January, when the coronavirus started spreading in China, the country’s import dropped by 12.87 per cent to $4.94 billion while the payments against imports dropped by 4.43 per cent to $32 billion in the first seven months of the current fiscal year. On the other hand, remittance inflow, riding on 2 per cent cash incentive, rose by 20.06 per cent or $2.09 billion year-on-year in July-February of the fiscal year 2019-2020. In the eight months of FY20, the country received $12.5 billion in remittance from the expatriate Bangladeshis against $10.41 billion in the same period of the previous fiscal year. In March, inflow of remittance exceeded $500 million in just nine days.
