Finance adviser Salehuddin Ahmed on Tuesday defended the purchase of dollars by the Bangladesh Bank from the market, saying that the central bank鈥檚 intervention was essential to check volatility in the foreign exchange rate.
The unstable exchange rate would give a bad signal to the expatriates sending millions of dollar home every month, he said while responding to a query on purchases of dollars by the central bank over the past one year.
鈥榃e cannot discourage the inflow of remittance,鈥� the finance minister told reporters after a meeting of the advisory council committee on government purchase at the secretariat in the capital Dhaka.
He observed that remittance was the real driver of the economy.
In the 2024-25 financial year, Bangladesh received a record $30.3 billion in remittances, marking a significant increase of about 27 per cent compared with those in the previous year.
The strong inflow has continued as expatriate Bangladeshis sent $4.9 billion in two months (July-August) of the FY聽2025-26, compared with that of $4.13 billion in the same period of the previous financial year, forcing the central bank to buy more dollars to keep the exchange rate of the dollar at about Tk聽120 against low demand for imports.
Under the Awami League regime which was ousted on August 5 past year in a mass uprising, the BB was forced to sell more than $25 billion from the foreign exchange reserves between 2022 and 2024, but failed to check the devaluation of the local currency to Tk聽110 in 2024 from Tk聽85 in 2022.
Since the regime change, the central bank has purchased about $2 billion from the country鈥檚 banks.
It intervened into the exchange rate despite the introduction of the market-based rate in May to appease the International Monetary Fund for releasing $1.3 billion in two tranches under the current $4.7 billion loan programme in the following month.
If the BB stops buying dollars, the price of the greenbacks will fall on the local market to make the imports of many
industrial raw materials and intermediate goods cheap and accelerate the easing of inflation which has been prevailing at an elevated level of over 9 per cent on average between September 2024 and August 2025.
Admitting the fact, Salehuddin, however, said that the country鈥檚 foreign exchange reserves were not meant only for assisting the importers and trades.
The country needs a healthy buffer of foreign exchange reserves to meet the challenge of exogenous shocks and emergency periods caused by cyclones and floods, he said.
It has been reported that the BB governor has set a target of building a buffer of $40 billion by the end of June 2026.聽聽
