Bangladesh Bank purchases dollar to stabilize Taka

[eastwatch]

BB continues dollar purchase - This year's tally swells close to $1b

Published: Monday, September 16, 2013
BB continues dollar purchase
This year's tally swells close to $1b
Star Business Report

Bangladesh Bank (BB) bought another $261 million this month from the open market to take the fiscal year’s tally close to $1 billion, the latest data shows.

“BB is purchasing the dollars to keep the exchange rate artificially stable. If it hadn’t, the greenback would have come down to Tk 70 from Tk 77.75,” said Monzur Hossain, research fellow of Bangladesh Institute of Development Studies.

The central bank bought $226 million in August and $512 million in July, according to data from BB. Last fiscal year, BB bought a record $4.54 billion without selling a cent.

The dollar-taka exchange rate has remained static at Tk 77.75 for nearly three months now, thanks to intervention by the BB. “But the central bank should slowly allow the market to set the dollar price,” Hossain added.

 

[damiendehorn]

BB buying dollars to keep the taka at 77 ok, we'll we can't allow the taka to appreciate too much as this wil have a negative effect on exports. BB is now sitting on a pile of green backs, an luckily the dollar also appreciates against a basket of currencies either the BB are real smart or real lucky.