Banks’ Forex Assets Fall to $3.94 B as Central Bank Buys More Dollars

Commercial banks’ foreign-exchange assets slid to $3.94 billion in September, driven largely by the Bangladesh Bank’s stepped-up purchases of US dollars, according to money-market insiders and officials.

As part of its effort to stabilise the taka, the central bank has been buying dollars through interbank auctions, a move reflected in the latest data on banks’ foreign-currency positions.

Official figures show that banks’ combined forex stock declined by over 10 percent from $4.36 billion in August. Over recent months, their holdings have followed a downward path — March ($5.11 billion), April ($4.50 billion), May ($4.98 billion), June ($4.25 billion), July ($4.27 billion) — before dipping further in September.

Compared to the same month last year, the total is down 26 percent, when banks held around $4.99 billion.

A central-bank official, requesting anonymity, said the economy is gradually recovering on the back of higher remittance inflows and export earnings. Under the flexible exchange-rate framework, the BB has bought more than $2 billion since mid-July 2025, the official added, describing this as a key factor behind the drop in banks’ forex reserves.

The intervention, aimed at stabilising the taka and maintaining liquidity, has released roughly Tk 259 billion into the financial system, helping banks meet local-currency obligations, according to central-bank sources.

Dr Md Touhidul Alam Khan, Managing Director and CEO of NRBC Bank, said the regulator’s purchases are designed to prevent volatility. “Imports have slowed, leaving banks with excess dollars. The central bank’s buying helps keep the exchange rate steady,” he explained.

He added that to maintain balance, the regulator sometimes caps banks’ open dollar positions or requires them to surrender surplus foreign currency.

A treasury head at a private bank, also speaking off the record, said that alongside the regulator’s purchases, a gradual rebound in import orders has reduced banks’ foreign-exchange holdings.

Bangladesh Bank data show fresh letters of credit (LCs) — an indicator of import demand — rose 13 percent in September to $6.22 billion, up from $5.38 billion in August. LC openings stood at $6.03 billion in July and $4.14 billion in June.

At the same time, the net open position (NOP) of banks — a key measure of their forex exposure — has fallen to about $800 million, down from over $1.2 billion three months earlier.