Business & Finance

Bangladesh Bank Sells $11.5 Million in First Open Auction, Meets 58% of Target

By ASM Saad

Bangladesh Bank sold $11.5 million of its foreign‑exchange reserves to six commercial banks on 14 September through an open auction, achieving about 58 % of its $20 million target. The sale was conducted at rates between Tk122.80 and Tk123.35 per dollar. A senior bank official said the intervention was intended to curb a recent rise in the exchange rate and indicated that the bank may sell dollars when demand pushes the rate up and buy them when foreign‑currency inflows increase. Previously, the bank had sold reserve dollars directly to selected banks during the 2022 crisis, but this was the first time it used an open auction. The auction was open to all commercial banks, with dollars allocated to the highest bidders. The LC settlement rate rose to Tk123.45 from Tk123.10 on Thursday and had been below Tk123 in the previous week. A senior banker noted that many banks may not have fully participated because it was the first auction and the process was new; banks were notified after 1 pm, by which time many had already arranged dollars for the day’s payments. He expects participation to increase in future auctions. Earlier this month, the bank had bought $50 million from four banks at Tk122.75 per dollar. Remittance houses offered dollars to banks at Tk123.40 before raising their asking rate to Tk123.60, but several banks declined the higher rate. Bankers anticipate that both LC settlement and remittance‑house rates will ease after the auction, as the central bank’s supply of dollars at Tk122.80‑Tk123.35 may put downward pressure on the market rate.