Bangladesh Bank Sells Dollars Again as Taka Edges Toward Tk124, a Second Market Intervention This Fiscal Year

Bangladesh Bank stepped into the foreign exchange market on October 20 and sold $20 million to commercial banks at Tk123.65 a dollar, its second open market dollar sale of the current fiscal year. The move came a day after the greenback looked ready to punch through the psychologically important Tk124 mark, a level the central bank has been quietly defending for weeks.

It is a small sum against reserves of more than $36 billion. But the timing says more than the size. The sale landed just before a five day Durga Puja bank holiday, with importers rushing to settle bills and fuel payments stacking up behind the break, and it follows a summer in which import demand has roared back to life.

• Bangladesh Bank sold $20 million at Tk123.65 on October 20, its second dollar sale this fiscal year after $11.5 million at Tk122.80 on September 14.
• The dollar rose about 85 paisa between the two interventions, roughly 10 paisa a day over the past week.
• Letters of credit opened in September topped $8 billion, the highest monthly figure in 53 months.
• Gross reserves stood at $36.39 billion as of October 17, recovering after dipping to $36.14 billion in late September.

What actually happened on October 20

Bangladesh Bank released $20 million from its reserves to commercial banks after bank purchase rates from exchange houses climbed to Tk123.60 on Sunday and kept drifting up through the day, eventually touching Tk123.70. Banks had been settling letters of credit and buying remittance dollars at Tk123.70 to Tk123.80, and the central bank judged that the gap between the official and street level rate had widened enough to act.

A senior central bank official told reporters the sale was meant as a signal as much as a fix: the bank wanted the market to know more reserves would be released if the rate kept climbing. Even so, the rate inched up anyway, since Tk20 million is a modest amount against daily market turnover. The last time the bank sold dollars this way was September 14, when it released $11.5 million at Tk122.80. The 85 paisa gap between those two interventions, in just over a month, is the clearest evidence yet that demand for dollars is outrunning supply even with remittances holding up.

Why dollar demand is outrunning supply

Central bank officials point to two forces pushing in the same direction. Fuel and fertiliser prices have climbed on the back of Middle East tensions, so the same physical volumes of imports now cost more dollars to land. Merchandise imports in July and August of this fiscal year grew more than 12 percent year on year to $12.20 billion, pushing the trade deficit for those two months to $3.82 billion. Letters of credit opened in September crossed $8 billion, the highest monthly figure in 53 months, a sign that businesses are restocking and placing fresh orders after a sluggish stretch.

The second force is seasonal. Banks were heading into the Durga Puja holiday, which closed banks nationwide from October 20 to 22, and wanted dollars sitting in their nostro accounts to cover obligations that would otherwise pile up during the break. State energy importers Petrobangla and the Bangladesh Petroleum Corporation also have payments due once banks reopen, adding to the pre holiday scramble. One senior commercial bank official said lenders were buying dollars from exchange houses at increasingly rich rates precisely because of this calendar squeeze.

How this compares with September's intervention

Date	Amount sold	Rate
September 14, 2026	$11.5 million	Tk122.80
October 20, 2026	$20 million	Tk123.65

The size of the sale nearly doubled between September and October, yet the rate still climbed 85 paisa in between, which tells its own story. A $20 million sale is not meant to flood the market; it is meant to put a ceiling on how fast the rate moves while reserves stay large enough to avoid panic. Reserves have cooperated so far. After dipping to $36.14 billion in late September from $36.30 billion a week earlier, they recovered to $36.39 billion by October 17 (equivalent to $31.58 billion under the IMF's stricter BPM6 measure), giving the central bank room to keep intervening without visibly running down its buffer.

Remittances have done much of the heavy lifting behind that recovery. Expatriates sent $1.74 billion home in the first 17 days of October alone, extending a fiscal year in which inflows are already running well ahead of last year's pace. That steady channel of dollars is precisely what has let the central bank sell into the market without reserves sliding the way they did during past currency crunches.

What comes next

Bangladesh Bank has made clear, through officials speaking on background, that Tk124 is the line it wants to hold for now, mostly because a weaker taka feeds directly into imported inflation on fuel, fertiliser and food at a time when headline inflation is already running near 8.3 percent. Expect more of these small, repeated sales rather than one large intervention, a pattern consistent with how the bank has managed the rate over the past year. Watch the days immediately after the Durga Puja holiday closes, when deferred payments from Petrobangla and BPC typically clear and the dollar queue at banks tends to lengthen again.

What it means for you

For importers and businesses that pay in dollars, every paisa the taka loses adds up across a shipment, and the drift toward Tk124 is a signal to lock in forward cover where possible rather than wait for a dip that may not come before the holiday backlog clears. For remittance senders and recipients, a weaker taka technically means more take home in local currency terms, though that gain is easily eaten up if fuel and food prices move with it. Savers watching their fixed deposits should note that a central bank intent on capping currency depreciation to fight inflation is also a central bank unlikely to cut its policy rate soon, which keeps a floor under FDR returns for now; readers comparing offers can check current options with the site's FDR rate comparison tool. Anyone converting dollars for travel or tuition payments abroad may find it useful to check live conversions with the currency converter before transacting.