Bangladesh Bank Seeks to Calm FX Fears as Taka Hits Record Low

Bangladesh’s central bank sought to reassure investors that the nation’s foreign-exchange market remains stable and the taka faces no immediate risk of depreciation, even as the currency slid to a fresh low against the dollar.

“Supply and demand of foreign currency are currently balanced” and “confidence and order exists in the market,” the central bank said in a statement late Tuesday night.

The comments highlight policymakers’ efforts to anchor expectations as persistent currency weakness raises concerns over external stability and reserve adequacy — a key issue for investors assessing frontier-market risk.

The taka fell 0.1% to a record low of 123.0235 against the dollar on Wednesday, according to data compiled by Bloomberg.

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Foreign currency liquidity in the banking system rose to $3.9 billion as of April 6, from $2.3 billion at the end of February, according to the statement. Bangladesh’s foreign exchange reserves stand at about $34.35 billion, which is a “strong shield against international payment pressure,” the central bank said.

Remittance inflows have also strengthened, reaching about $3.8 billion in March, the highest monthly figure on record. In the first six days of April, inflows totaled $660 million, nearly 21% higher than a year earlier.

Despite banks’ net open positions rising to about $1 billion — above the $600 million to $700 million threshold that would typically trigger dollar purchases — the central bank has not intervened in the market over the past month, according to the statement. Had it done so, reserves would have been closer to $36 billion, it said.

Import payments and foreign debt repayments are proceeding normally, the central bank said, with $1.37 billion in Asian Clearing Union bills and about $180 million in government external debt paid last month.