To meet up the high volume of import payment, the Bangladesh Bank (BB) continues to sell dollars to the local banks, which amounted to $2.5 billion in the last five months (August-December) of this fiscal year, according to the central bank's latest data.
In spite of the central bank's intervention, the price of dollars continued to gain against the local currency, which raised the import cost creating an extra burden on local importers.
The interbank exchange rate hit Tk86 per dollar on 9 January for the first time, up from $85.80 on Thursday.
Md Serajul Islam, executive director of the central bank told The Business Standard that the regulator has taken the decision to increase the dollar price to adjust the export-import market. To help the exporters the central bank is adjusting the dollar price periodically as export is currently lower than import.
"At the same time, the central bank is selling dollars to meet the importers' demand," he said, adding, "We are monitoring both the local and world market regularly."
In December last year, the central bank sold $451 million, which was $568 million in November. In the months of August, September, and October the volume was $305, $641, and $518 million respectively – a total of $2.493 billion.
According to an industry insider, the import costs increased the devaluation of the local currency against the US dollar, and this trend would negatively impact import payment in the international market.
"When dollar rates increase, importers are affected. That is why we asked the government to fix a specific dollar rate for exports and imports, which has not been implemented yet," Mohammad Hatem, executive president at the Bangladesh Knitwear Manufacturers and Exporters Association, said.
"Ultimately the commoners suffer," he added.
However, the bankers are saying the value of the US dollar is increasing as imports have also increased as the country's economy has started to bounce back with an improving pandemic situation.
According to Bangladesh bank's latest data, the country's import payments surged by around 54% in the first five months of the current fiscal year compared to the corresponding period of last year – indicating a strong and steady economic recovery in the period when coronavirus infections dropped significantly.
Import bills in July-November swelled 53.74% year-on-year to $30.3 billion, according to the central bank data. With nations facing the pandemic funk, the settlement of Letters of Credit (LC), also known as actual import payments, in the corresponding period last year stood at $19.72 billion.
Imports of yarn, capital machinery, and intermediate goods had a major contribution to the bills, which means production lines are alive and kicking and there has been a strong consumer demand at home.
However, spiralling commodity prices in the international market and spiked shipping costs pushed up the import payments.