The exchange rate of Bangladesh Taka (BDT) depreciated significantly against the US dollar on Monday mainly due to higher demand for the greenback for settling the import bills.
The local currency depreciated by 10 poisha in the inter-bank foreign exchange (forex) market on the day after 22 days, according to market operators.
The US dollar was quoted at Tk 84.45 each in the inter-bank forex market on the day against BDT 84.35 of the previous working day, they said.
Senior bankers, however, said the exchange rate of BDT is likely to depreciate further against the US currency in the near future if the import payment obligations increase particularly for mega infrastructure projects.
Talking to the FE, Syed Mahbubur Rahman, chairman of Association of Bankers, Bangladesh (ABB), said the country's overall export earnings and the inflow of remittance will be increased following depreciation of the local currency against the US dollar.
Such depreciation will also increase the cost of imports, Mr. Rahman, also managing director (MD) and chief executive officer (CEO) of Dhaka Bank limited, added.
"Higher import cost may push up the inflationary pressure on the economy slightly in the near future," Mehmood Husain, MD and CEO of NRB Bank Limited, told the FE while replying to a query.
The senior banker also said export competiveness in the global market along with the flow of inward remittance will increase following such depreciation of the local currency against the US dollar.
The local currency depreciated by 55 poisha against the greenback in the inter-bank forex market from January 03 to April 29.
Earlier on April 08 last, the BDT lost its value by five poisha against the US currency on the same ground.
The greenback was quoted at Tk 84.45 each in the market on Monday against Tk 83.90 on January 02 this calendar year.
On the other hand, the BDT depreciated by eight poisha against the US dollar at customer level for settling import payment obligations.
The exchange rate of the US dollar rose to maximum Tk 84.48 each for sale of Bill for Collection (BC) on the day, from maximum Tk 84.40 of the previous week, the market operators added.
The local currency faced such depreciation, although the Bangladesh Bank (BB) expedited its foreign currency support to the commercial banks last week to keep the forex market stable.
Under the latest move, the BB's selling of the greenback to the banks, particularly the public sector ones, rose to $87 million last week from $55 million a week before.
A total of $2.09 billion has been sold since July 01 of the current fiscal year (FY), 2018-19, to the commercial banks as part of BB's ongoing support, according to latest official figures.
The central bank is continuously providing such support to the banks for making import payments, particularly for fuel-oils, fertilisers, LNG (liquefied natural gas), and capital machinery for power plants.
"We may continue providing such foreign currency support to the banks in line with the market requirement," a BB senior official hinted.
The demand for the US currency is gradually increasing, mainly due to higher import payments pressure, particularly of intermediate goods, capital machinery and fuel oils, according to the market operators.
