Stable BDT Against USD Provides Relief for Forex Reserves

Bangladesh's trade competitiveness has improved as the taka depreciated against the US dollar in February 2025. In January, the taka was overvalued by Tk 3.67, but in February, this reduced to Tk 2.27, according to Bangladesh Bank calculations.

Bangladesh’s foreign exchange reserve fell to $19.7 billion under IMF guidelines after a $1.75 billion payment to the Asian Clearing Union for January-February import bills, down from $21.39 billion on March 6. The Bangladesh Bank’s conventional valuation puts reserves at $24.95 billion.

Bangladesh's foreign exchange reserves have dropped to $20 billion after a $1.67 billion payment to the Asian Clearing Union (ACU) for November-December imports. This figure, calculated using the IMF's BPM-6 method, is lower than the central bank's estimate of $24.9 billion. 

The Bangladesh Bank has raised the crawling-peg rate for the dollar from Tk 117 to Tk 119, with additional allowances for remittance purchases and bank profits capped at 2.5% and 1% respectively. Economists remain sceptical, arguing that stabilizing the dollar market requires a demand-driven exchange rate, enhanced monitoring of illegal dollar trading, and stricter controls on over-invoicing and smuggling.

The Bangladesh Bank has introduced a foreign exchange intervention strategy to support a new exchange rate regime of a crawling peg with a band, aiming for greater flexibility. This strategy seeks to enhance macroeconomic balance, preserve reserve buffers, and improve monetary policy efficiency.

Bangladesh Bank (BB) will raise the US dollar mid-rate to Tk 119 from Tk 117, allowing a 1.5%-2% swing, and unify remittance and export earnings rates at Tk 123. A daily interbank exchange rate based on transactions will be published, addressing recent underuse of the market.