Bangladesh Bank has not sold a single US dollar since August 14 last year as part of a strategy to keep the exchange rate stable to curb inflation, Governor Ahsan H Mansur said on Sunday.
He was speaking at a discussion titled “365 Days of the Interim Government”, organised by the Centre for Policy Dialogue at Lakeshore Hotel in Dhaka’s Gulshan. The session was chaired by CPD distinguished fellow Mustafizur Rahman, while CPD executive director Fahmida Khatun presented the keynote paper.
“We realised that to reduce inflation, keeping the exchange rate stable is essential. Therefore, our policy was not to sell a single dollar. That policy has been followed rigorously since August 14 last year,” Mansur said.
On the state of foreign banks’ lines of credit, he recalled that when the interim government began, more than 200 foreign banks had suspended letters of credit. “At our first meeting with international bankers, we asked them to stop closing LCs any further. If the situation did not improve, they could then take action. Since then, we have never defaulted on payments and will not in the future.”
At that time, overdue payments stood at $2.5 billion, which were pledged to be settled in phases, he said. With increased remittance and export earnings, all foreign banks have now returned to their previous positions, and some have even increased their credit lines.
On Dubai-based aggregators, Mansur said they were told to sell dollars at the fixed rate of Tk122, or the central bank would not buy from them. “They can hold on to dollars if they wish, but we know they cannot keep them for more than five to seven days,” he said.