Commercial banks’ dollar holdings fell below $4 billion in September 2025 — the lowest level in five years — as large-scale dollar purchases by the central bank and higher import payments squeezed their foreign currency balances.
According to the latest Bangladesh Bank data, commercial banks’ gross foreign currency balance dropped to $3.93 billion in September, down from $4.98 billion in the same month last year and $4.35 billion in August 2025.
The figure was the lowest since October 2019, when banks held around $3.8 billion.
Bankers said that the decline in dollar holdings came despite a strong improvement in foreign exchange inflows over the past year, driven by record remittances and rising export earnings.
However, these inflows had created a temporary surplus in the banking system, leading to a sharp fall in the dollar’s value in the open market, they said.
In June, the exchange rate slipped to Tk 119 per dollar, prompting Bangladesh Bank to intervene.
Since July, the central bank has purchased about $2.12 billion from commercial banks under a multiple-price auction system, paying between Tk 121.5 and Tk 121.9 per dollar.
The move aimed to stabilise the exchange rate and rebuild reserves, keeping the rate steady at around Tk 122 since August.
Officials at the central bank said that the intervention helped restore confidence in the foreign exchange market, while also ensuring that remittance inflows continued through official channels.
Remittance inflows have remained robust, with migrant workers sending home a record $30.32 billion in FY25 — a 26.8 per cent increase from $23.91 billion in FY24.
Monthly inflows have consistently exceeded $2 billion since August 2024.
Export earnings also rose by 8.6 per cent year-on-year to $48.3 billion in FY25, according to the Export Promotion Bureau.
Meanwhile, import demand picked up modestly, with letters of credit (LCs) issued worth $69 billion in FY25 compared to $66.7 billion the previous year.
The gradual rebound in imports, coupled with the central bank’s aggressive dollar buying, significantly reduced foreign currency balances at banks.
Bankers said that another reason for the fall was that many banks preferred to sell their surplus dollars to the central bank rather than hold them, given the limited opportunities for private sector foreign exchange use.
The narrowing gap between the official interbank exchange rate and the informal hundi market also encouraged migrants to channel remittances through banks.
The official rate has steadily risen — Tk 93.45 per dollar in June 2022, Tk 106 in June 2023, Tk 110 in December 2023, and Tk 123 in October 2025 — reflecting the taka’s gradual adjustment to market levels.
Bangladesh Bank officials said the policy shift from dollar sales to purchases has helped rebuild reserves, which reached $27.12 billion on October 9 under the IMF’s BPM6 calculation method.
The gross reserve, on a traditional basis, stood at $31.93 billion.
Experts however said that while dollar purchases have supported stability, the sharp fall in banks’ holdings could limit their ability to finance import payments in the coming months, potentially tightening foreign exchange liquidity again if inflows slow down.