Bangladesh Bank Sells $420 Million from Reserves

To strengthen foreign exchange reserves, Bangladesh Bank had purchased a significant amount of dollars from commercial banks in the last fiscal year. However, within a single fiscal year, it has shifted from that position and is now selling dollars from its reserves. As of November 14 of the current fiscal year 2026-27, Bangladesh Bank has supplied approximately $420 million to the market.

According to updated data from Bangladesh Bank, the central bank had purchased approximately $5.7 billion from commercial banks in the fiscal year 2025-26. In contrast, it has sold around $420 million so far in the current fiscal year. This means that while it accumulated dollars from the market last fiscal year, it is now compelled to release dollars from reserves to meet market demand.

This trend is also reflected in Bangladesh Bank’s monetary policy review report. The report states that the central bank purchased $5.7 billion from the market from July to April of the fiscal year 2025-26. No dollars were sold from reserves during that period. However, as of November 14 of the current fiscal year, approximately $420 million has been sold.

Changes in demand and supply in the foreign exchange market are considered a significant reason behind this shift in the central bank’s stance. Last fiscal year, an increase in remittance inflows and export earnings improved the dollar supply situation in the market. This created an opportunity to purchase dollars from the market to enhance reserves and prevent exchange rate instability.

However, new pressure has emerged in the foreign exchange market in the current fiscal year. According to Bangladesh Bank data, the demand for dollars has increased due to rising prices of fuel oil and gas in the international market and an increase in consumer goods imports ahead of the upcoming Ramadan. In this situation, the central bank is selling dollars from its reserves to stabilize the exchange rate.

Arif Hossain Khan, spokesperson and executive director of Bangladesh Bank, told the media that dollars have been sold on a limited scale after reviewing the overall market situation. However, he also stated that the country’s foreign exchange reserves are in a good condition.

Meanwhile, some bankers have questioned the increase in dollar demand. In their view, despite record-high remittance inflows, it is necessary to review why volatility is occurring in the dollar market.

Bankers argue that growth in credit flow to the private sector is currently around 4 percent. Concurrently, imports of various essential industrial goods have also decreased. In such a situation, it is important to investigate why additional demand for dollars is being generated.

It is noteworthy that in the five years following June 2020, Bangladesh Bank sold a total of $35.35 billion from its foreign exchange reserves. During the same period, it purchased $12.33 billion from the market.

Following a political change in August 2024, the central bank had stopped selling dollars from its reserves. After a long hiatus, Bangladesh Bank resumed selling dollars in September 2026.

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