by Naim-Ul-Karim
DHAKA, Dec. 19 (Xinhua) -- The price of the U.S. dollar has gone up again in Bangladesh as demand in the import sector jumps ahead of the Muslim holy fasting month of Ramadan which is set to start in March and the central bank of Bangladesh prepares to bolster the nation's dwindling foreign exchange reserves.
Market insiders said the price of the U.S. dollar has gone up to some extent this week both in banks and kerb market.
Although Bangladesh Bank (BB) fixed the exchange rate at 120 taka, some private banks bought remittances at 126.50 taka to 127 taka reportedly this week.
Also, the U.S. dollar is being sold at a raised rate in the money exchanges.
In light of the overall situation, BB said it is considering launching a "new mechanism."
BB spokesperson and executive director Husne Ara Shikha told private news agency bdnews24.com that a circular in connection to "new mechanism" will be issued soon.
BB reportedly aims to push net reserves up to 15.30 billion dollars at the end of December to meet the condition imposed by the International Monetary Fund (IMF).
Against this backdrop, the central bank is purchasing U.S. dollars from commercial banks instead of selling to them.
"Dollar prices went up mainly because of increased demand in the import business," said Shikha.
Bangladesh's foreign exchange reserves fell by 1.23 billion dollars to 18.61 billion dollars by the end of November 2024, the latest central bank data showed.
Chris Papageorgiou, chief of the Development Macroeconomics Division of the IMF Research Department, who is now visiting Bangladesh, said in a press conference on Thursday that the IMF will disburse the fourth tranche of the 645-million-dollar loan to Bangladesh after raising the issue at the IMF's executive board meeting to be held in February to review whether Bangladesh has met the conditions attached.
IMF had earlier offered an additional 1 billion dollars to Bangladesh, but the country's interim government is pushing for at least 2 billion dollars to implement its reform agenda, narrow the deficit in the current account, shore up the dollar stockpile and rein in inflation, which accelerated to 11.38 percent in November, the highest in four months.
IMF on Wednesday further cut Bangladesh's growth forecast and kept its projection on inflation elevated for the current fiscal year.
The South Asian economy may grow 3.8 percent in fiscal year 2024-25, down from 4.5 percent the multilateral lender projected in early October, due to output losses caused by the domestic political turmoil, floods, and tighter policies, said the Washington-based lender on Wednesday.
