The central bank is increasing the supply of money by buying dollars
Published: 08:24 PM, 05 November 2020
The central bank is supplying cash in the market by buying dollars to prevent devaluation. In the first four months of the current financial year (July-October), it has bought 3.6 billion US dollars. At the same time, banks and financial regulators have released Tk 30,000 crore in cash to stabilize the supply of local market currency.
Industry insiders say the surplus in the market is due to rising remittance inflows and declining demand for the dollar. The demand for investment is low. Imports have also declined. As a result, banks are forced to bring dollars to the central bank as they cannot use foreign currency. The central bank is forced to buy it. As a result, foreign exchange reserves have so far exceeded the highest milestone of হাজার 4.1 trillion. The flow of money in the market is increasing as cash is released against the dollar. The people concerned are fearing that the inflation will increase due to the money supply.
According to the Bank of Bangladesh, in the first four months of the financial year, the central bank bought 3.6 billion (360 crore) US dollars. Meanwhile, Bangladesh Bank has released Tk 30,240 crore in cash. The central bank will provide Tk 36,000 crore to the market in various ways, including easing policies to help the entrepreneurs affected by the epidemic and to implement the announced incentive package to revive the economy.
Meanwhile, due to increased liquidity supply in the market, the excess liquidity in the banking system at the end of August this year stood at Tk 1,60,98.7 crore.
It is learned that if the central bank releases one taka, the market will be affected six and a half times. For this reason, the money of the central bank is called hot money. With the declining demand for investment in the country and the banks adopting a slow-moving policy to monitor the current situation, the surplus dollar remains in the hands of every bank. Banks are bringing it to Bangladesh Bank as they cannot use it anywhere. Bangladesh Bank is buying dollars from banks in the interest of keeping the foreign exchange market stable. The central bank is giving local currency to the banks against this dollar. In this way the flow of money in the market is increasing. As the workload decreases, so does the purchasing power of the people, and if inflation rises, the suffering of the people will increase.
Concerned officials of Bangladesh Bank said that in the current context, there is no other way but to buy dollars from the central bank. Because of the declining demand in the market, the dollar is in surplus. If not, the dollar will fall. Expatriates will be affected. As a result, they will be discouraged from sending remittances. On the other hand, export income will also decrease. With these things in mind, we have to buy dollars from the market; Otherwise the dollar would have devalued. It also has negative effects. Import costs are rising.
According to business entrepreneurs, exporters need to be given special incentives to survive the price competition in the international market during the corona outbreak. They think that the export-trade will be able to turn around again. According to the prevailing rules, according to the policy of Bangladesh Bank, a bank can hold 15 per cent of its capital in foreign currency. In addition, he will have to sell dollars in the market.
The bankers said,Economic activity has stalled for six months due to the corona. Import costs have come down. Human demand has decreased. On the other hand, a huge amount of foreign currency was spent on medical treatment abroad every month. But no one has been going abroad for treatment for six months because of Corona. Again, every year the pilgrims spend a huge amount of foreign currency to perform the holy Hajj. But this time it did not happen because of Corona. Meanwhile, workers who have been working abroad for a long time have become unemployed due to corona. Bangladeshi workers are now being sent back from many countries. As a result, many people are sending long-saved money to the country from abroad. Due to this, a record amount of remittances has come in the last few months. This trend of remittance flow is still continuing. Meanwhile, despite the decline in exports, some export earnings are coming to the country every month. At the same time foreign loans and foreign grants are coming. All in all, the amount of foreign exchange coming is due to the stagnation of economic activitiesThe amount is not being spent. As a result, every bank has a surplus of foreign exchange. Foreign exchange transactions in the interbank money market have declined due to lack of demand.
Meanwhile, banks are still buying foreign currency at higher prices through remittance houses. But it is not able to use it due to lack of demand.
www.jagonews24.com
Published: 08:24 PM, 05 November 2020
The central bank is supplying cash in the market by buying dollars to prevent devaluation. In the first four months of the current financial year (July-October), it has bought 3.6 billion US dollars. At the same time, banks and financial regulators have released Tk 30,000 crore in cash to stabilize the supply of local market currency.
Industry insiders say the surplus in the market is due to rising remittance inflows and declining demand for the dollar. The demand for investment is low. Imports have also declined. As a result, banks are forced to bring dollars to the central bank as they cannot use foreign currency. The central bank is forced to buy it. As a result, foreign exchange reserves have so far exceeded the highest milestone of হাজার 4.1 trillion. The flow of money in the market is increasing as cash is released against the dollar. The people concerned are fearing that the inflation will increase due to the money supply.
According to the Bank of Bangladesh, in the first four months of the financial year, the central bank bought 3.6 billion (360 crore) US dollars. Meanwhile, Bangladesh Bank has released Tk 30,240 crore in cash. The central bank will provide Tk 36,000 crore to the market in various ways, including easing policies to help the entrepreneurs affected by the epidemic and to implement the announced incentive package to revive the economy.
Meanwhile, due to increased liquidity supply in the market, the excess liquidity in the banking system at the end of August this year stood at Tk 1,60,98.7 crore.
It is learned that if the central bank releases one taka, the market will be affected six and a half times. For this reason, the money of the central bank is called hot money. With the declining demand for investment in the country and the banks adopting a slow-moving policy to monitor the current situation, the surplus dollar remains in the hands of every bank. Banks are bringing it to Bangladesh Bank as they cannot use it anywhere. Bangladesh Bank is buying dollars from banks in the interest of keeping the foreign exchange market stable. The central bank is giving local currency to the banks against this dollar. In this way the flow of money in the market is increasing. As the workload decreases, so does the purchasing power of the people, and if inflation rises, the suffering of the people will increase.
Concerned officials of Bangladesh Bank said that in the current context, there is no other way but to buy dollars from the central bank. Because of the declining demand in the market, the dollar is in surplus. If not, the dollar will fall. Expatriates will be affected. As a result, they will be discouraged from sending remittances. On the other hand, export income will also decrease. With these things in mind, we have to buy dollars from the market; Otherwise the dollar would have devalued. It also has negative effects. Import costs are rising.
According to business entrepreneurs, exporters need to be given special incentives to survive the price competition in the international market during the corona outbreak. They think that the export-trade will be able to turn around again. According to the prevailing rules, according to the policy of Bangladesh Bank, a bank can hold 15 per cent of its capital in foreign currency. In addition, he will have to sell dollars in the market.
The bankers said,Economic activity has stalled for six months due to the corona. Import costs have come down. Human demand has decreased. On the other hand, a huge amount of foreign currency was spent on medical treatment abroad every month. But no one has been going abroad for treatment for six months because of Corona. Again, every year the pilgrims spend a huge amount of foreign currency to perform the holy Hajj. But this time it did not happen because of Corona. Meanwhile, workers who have been working abroad for a long time have become unemployed due to corona. Bangladeshi workers are now being sent back from many countries. As a result, many people are sending long-saved money to the country from abroad. Due to this, a record amount of remittances has come in the last few months. This trend of remittance flow is still continuing. Meanwhile, despite the decline in exports, some export earnings are coming to the country every month. At the same time foreign loans and foreign grants are coming. All in all, the amount of foreign exchange coming is due to the stagnation of economic activitiesThe amount is not being spent. As a result, every bank has a surplus of foreign exchange. Foreign exchange transactions in the interbank money market have declined due to lack of demand.
Meanwhile, banks are still buying foreign currency at higher prices through remittance houses. But it is not able to use it due to lack of demand.
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