The central bank sold a record amount of $2.34 billion to the banks directly in the outgoing fiscal year (FY), but the local currency keeps losing its value against the greenback.
Officials said dollar was supplied to commercial banks from July 01 to June 24 in FY '19 as part of its ongoing liquidity support to settle import payment obligations.
Such sale was $2.31 billion in FY '18.
"We've provided such foreign exchange support to help banks foot import payment bills, particularly for oil, capital machinery for power plants, liquefied natural gas (LNG) and fertiliser," a senior official of the Bangladesh Bank (BB) told the FE on Friday over phone.
The BB had to provide more than $100 million to the banks, particularly the state-owned commercial banks (SoCBs), per month to clear import bills for LNG, he said while explaining higher sale of the greenback in FY '19 than a year before.
"Quarterly payment of the government portion for implementation of Rooppur Nuclear Power Plant (NPP) has also pushed up sale pressure on the central bank in the FY 19," the central banker added.
The NPP project is estimated at $12.65 billion, 90 per cent of which is being provided by Russia on credit with LIBOR (London Interbank Offered Rate) plus 1.75 per cent interest.
The remaining 10 per cent is being paid by the Bangladesh government, according to the agreement.
Bangladesh Atomic Energy Commission (BAEC) earlier opened the letter of credit (LC) worth $11.38 billion through Sonali Bank Ltd to import different items, including capital machinery, for the plant.
The BAEC is settling the LC using the Russian credit, which will have the tenure of 30 years with a 10-year grace period.
Bangladesh will have to start repaying the loans from March 2027, according to an official document.
Market operators, however, said the value of taka against dollar keeps falling, despite the BB's continued foreign currency support in FY '19.
Taka depreciated by 77 paisa against dollar in the inter-bank foreign exchange market in FY '19 mainly due to higher demand for the greenback, they added.
Dollar was quoted at Tk 84.50 each in the inter-bank foreign exchange market on Thursday, the last working day of this fiscal, unchanged from the previous level.
It was Tk 83.73 in June 2018.
"The exchange rate of local currency maintained a depreciating mode in FY '19 mainly due to current account deficit," a senior treasury official of a leading private commercial bank told the FE.
The country's current account deficit continues to pose risks to macroeconomic stability despite its 35 per cent fall in the first 10 months of FY '19.
The gap stood at $5.06 billion between July last year and April this year, the BB data showed.
Continued foreign exchange support by the BB to the commercial banks has helped keep the market almost stable this fiscal, the private banker added.
"There was no alternative but to sell dollar by the central bank to keep the foreign exchange market stable," MA Halim Chowdhury, managing director and chief executive officer of Pubali Bank, told the FE.
The demand for dollar might be eased slightly in the next fiscal if the rising trend in inward remittance and export earnings continues, he also predicted.
