Central Bank Of Bangladesh Continues Intervention In Forex Market

April 3, 2008 5:15 p.m. EST

Dhaka, Bangladesh (AHN) - The central bank of Bangladesh on Thursday sold more the U.S. dollar as a part of its ongoing intervention to keep the foreign exchange market stable, officials say in Dhaka. The Bangladesh Bank (BB), the country's central bank, sold US$20 million at prevailing market rate to two commercial banks on the day to meet the growing demand for the currency.

The central bank of Bangladesh started intervening in the inter-bank foreign exchange market through selling of U.S. dollar in October, 2007 aiming to keep the market stable. The BB has since sold over $520 million to the commercial banks as part of its intervention in the market, the central bank officials confirmed.

The central bank is continuously selling the U.S. dollar to the commercial banks giving priority to help settlement of import payment bills for essential items including food grains and petroleum products, they noted. They also said the central bank will continue its intervention in the inter-bank foreign exchange market to help the commercial banks settle their import bills for essentials.

Meanwhile, the money market was active, as banks and financial institutions borrowed cash at high rates from the inter-bank market to meet urgent requirements of their clients, treasury officials said.