BB resumes dollar sales after 14 months

Bangladesh Bank has resumed selling US dollars to commercial banks through auction after more than 14 months, selling US$11.5 million from its reserves to assess demand and the prevailing exchange rate.

Six commercial banks purchased the dollars at an auction held on Monday, according to information released by the central bank on Tuesday.

The exchange rate ranged from Tk122.80 to Tk123.35 per dollar, with the average rate standing at Tk123.22. The cut-off rate was Tk122.80.

Bangladesh Bank generally sells dollars to commercial banks on a case-by-case basis depending on market demand. 

The latest auction, however, was conducted to gauge whether there was additional pressure on the dollar market and assess the market-based exchange rate.

Bangladesh Bank spokesperson and Executive Director Arief Hossain Khan said the central bank uses such transactions to assess whether there is excess demand for dollars and determine the prevailing exchange rate.

“There has not been any decision yet on whether Bangladesh Bank will move to the auction system. At the time of the next sale, the central bank will assess the market situation and decide accordingly,” he said.

A senior central bank official said the auction was also aimed at testing claims that banks were facing a dollar shortage and that the exchange rate could rise further.

“Some had claimed that banks were facing a dollar shortage and the exchange rate could rise further. The auction was held to see whether there was actually any pressure in the market,” the official said.

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Bangladesh Bank offered $20 million for sale, but only six banks submitted bids, seeking a combined $11.5 million. All the bids were accepted.

“The banks could have taken another $8.5 million if they wanted. This indicates that there is sufficient liquidity in the market and no significant pressure on the dollar,” the official said.

The latest sale marks a shift in Bangladesh Bank’s foreign exchange operations after the central bank purchased around $6 billion from the market over the past 14 months as foreign currency inflows improved and pressure on the exchange market eased.

The central bank began purchasing dollars in July 2025 after the foreign exchange market showed signs of stabilisation. 

Its last auction-based purchase from commercial banks took place on 1 September, when it bought $50 million at a cut-off rate of Tk122.75 per dollar.

The resumption of dollar sales comes amid a slight increase in demand for foreign currency, partly driven by higher import payments following a rise in global oil prices.

The US-Israel war with Iran has pushed global fuel prices higher, raising concerns over import costs for fuel-dependent countries such as Bangladesh. Brent crude futures rose 1.3% to $107.05 a barrel on Tuesday.

Bangladesh Bank data showed that the country’s import payments increased 8.6% year-on-year to $6.44 billion in July. Petroleum product imports surged 83.3% to $1.37 billion during the month, contributing significantly to the increase in the overall import bill.

Export earnings, meanwhile, declined 1.6% year-on-year to $4.35 billion in July.

Despite the recent increase in dollar demand, Bangladesh’s foreign exchange reserves have strengthened significantly from a year earlier.

Gross reserves stood at $31.36 billion under the IMF’s BPM6 methodology as of 10 September, up from $25.68 billion during the same period last year.