To comply with IMF conditions, Bangladesh Bank has been increasing its foreign exchange reserves by purchasing dollars from commercial banks. This strategy has led to a rise in the dollar's value, which had remained stable for a long time. Some banks are now buying dollars from foreign exchange houses at rates as high as 125.40 BDT. Besides reserve purchases, increased imports ahead of Ramadan have also contributed to the rising dollar demand. Experts caution that this could add pressure to the already high inflation rate.

Bangladesh Bank aims to raise net reserves to $15.30 billion by December 2024, as per IMF requirements. To achieve this, it has been buying surplus dollars from banks. At the same time, the government is encouraging the opening of letters of credit (LCs) to ensure smooth product supplies for Ramadan. The IMF has expressed concerns over the prolonged stability of the dollar exchange rate at 120 BDT and recommended adopting a more market-based approach. As a result, Bangladesh Bank is considering introducing auction-based dollar transactions, though no final decision has been made.

Data from Bangladesh Bank shows gross reserves stood at $19.80 billion as of December 15, 2024, up from $19.20 billion on December 11. Net reserves, however, remain below $15 billion, requiring further growth to meet IMF targets. In response, banks with surplus dollars prefer selling to Bangladesh Bank for security reasons, while demand from larger exchange houses and LC payments have driven up dollar prices.

In November 2024, the reserves had dropped to $18.46 billion due to payments to the Asian Clearing Union, reflecting the challenges faced during the previous government, when reserves declined by an average of $1.3 billion monthly. The current measures are aimed at stabilizing the reserves, which had peaked at $48.04 billion in August 2021 before a significant downturn caused by increased imports and external factors like the Russia-Ukraine war.

The IMF team currently visiting Dhaka has stressed the need for a flexible exchange rate to reflect market dynamics. They are reviewing progress on conditions tied to the $4.7 billion loan package, which includes reserve targets. While Bangladesh Bank has indicated stability in the dollar market due to increased remittances and exports, steps to make rates more dynamic may be implemented soon. For now, pressure remains as banks reportedly offer higher rates for dollars due to demand, with rates in foreign markets climbing beyond the central bank's "crawling peg" limit of 120 BDT.