Bangladesh Bank is considering a dollar-taka currency swap with commercial banks to address volatility in the forex market. The arrangement aims to help foreign currency-starved banks acquire dollars from Bangladesh Bank (BB) in exchange for local currency, while banks with surplus dollars can engage in similar exchange deals with BB.
The move addresses challenges where some banks lack local currency despite having an adequate foreign exchange, and vice versa. BB spokesperson stated that the swap network is in planning, with the Foreign Reserves and Treasury Management Department overseeing the execution. The interest rate structure and tenure of the arrangement are yet to be finalized. The central bank’s forex reserves stand at approximately $20 billion as of January 24.
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