BB advises banks against dollar buying spree

Bangladesh Bank (BB) advised commercial banks against aggressively buying dollars from remitters when they have no immediate overseas payment obligations, warning that such competition is adding to volatility in the foreign exchange market.

The advice came at a meeting between the central bank and treasury heads of commercial banks at Bangladesh Bank headquarters on Sunday, following a fresh rise in the dollar exchange rate in recent days.

Deputy Governor Md Sarwar Hossain chaired the meeting, which was called to review the latest forex market situation and discuss ways to prevent further instability.

Several treasury heads told the meeting that some banks were aggressively collecting remittances even without having immediate foreign payment obligations. Others were offering higher rates to secure dollars ahead of their overseas payments.

Such competition among banks is pushing up the exchange rate and creating unnecessary pressure on the market, they said.

In response, Sarwar advised banks to avoid desperate purchases of remittance dollars when there was no immediate payment pressure, according to officials who attended the meeting.

He also assured bankers that Bangladesh Bank was ready to supply dollars if any commercial bank faced difficulties meeting its overseas payment obligations.

The central bank's support would help banks settle their foreign payments without entering into aggressive competition for remittance dollars, meeting participants quoted the deputy governor as saying.

Bangladesh Bank has already sold more than $450 million in the current fiscal year (FY27) as part of its efforts to manage the foreign exchange market and maintain stability.

However, the pressure on the dollar market has continued. The average bills for collection (BC) selling rate for customers at major commercial banks rose to Tk125.10 per dollar on November 12, up from Tk124.95 a day earlier.

The latest rise suggests that demand for foreign currency remains strong despite the central bank's intervention.

The central bank is now seeking greater discipline among banks in collecting remittances, while assuring them of support in meeting genuine overseas payment needs.