Bangladeshi Commercial Banks purchasing remittances at Tk123 ahead of oil LC settlement

Bangladesh’s foreign exchange market is showing fresh signs of pressure as commercial banks raise remittance buying rates to Tk123 per US dollar ahead of major oil import LC settlements. With large payments due from Bangladesh Petroleum Corporation (BPC) and Petrobangla, the banking sector is preparing for increased dollar demand, which may influence exchange rates, import costs, and overall market liquidity in the coming days.

Several commercial banks in Bangladesh purchased inward remittances from exchange houses at Tk123 per US dollar today, signaling renewed pressure in the country’s foreign exchange market.

Senior banking officials confirmed that banks slightly increased the remittance buying rate as they prepare for major upcoming import letter of credit (LC) settlements, especially for fuel and energy imports. Earlier this week, banks were purchasing remittance dollars at rates between Tk122.85 and Tk122.90 per dollar.

According to bankers, the latest increase is mainly linked to large foreign currency payments scheduled for next week by Bangladesh Petroleum Corporation (BPC) and Petrobangla. These two state-owned entities are expected to settle significant oil and gas import bills, creating strong short-term demand for US dollars.

Bank officials explained that remittance inflows are usually stronger during the first half of every month, while inflows tend to slow down between the 15th and 25th. Since the market is currently entering that slower remittance period, banks are trying to secure additional dollar inflows in advance to maintain liquidity.

Although overall dollar supply remains stable in the banking system, some banks have started offering slightly better exchange rates to attract remittance inflows from overseas Bangladeshis. This strategy helps them prepare for large import obligations without creating sudden pressure in the interbank foreign exchange market.

This development comes despite verbal guidance from Bangladesh Bank earlier this month, where banks were informally advised not to purchase US dollars above Tk122.90 per dollar. However, market realities and rising demand for import settlements have pushed some banks to exceed that unofficial level.

Bankers also warned that foreign currency demand may rise further in the coming week due to scheduled payments for energy imports. If demand continues to increase while remittance inflows remain slow, exchange rates may face mild upward pressure.

In the past two weeks, Bangladesh Bank purchased around $180 million from commercial banks as part of its reserve strengthening strategy. This indicates that the central bank still sees sufficient dollar availability in the market despite short-term fluctuations.

At present, Bangladesh’s foreign exchange reserves stand at $30.48 billion. A senior Bangladesh Bank official stated that the market currently has adequate dollar liquidity, which is why the central bank has been able to continue purchasing foreign currency from banks while also maintaining reserve stability.

Probable Impacts on the Economy

The increase in remittance buying rates may have several short-term and medium-term impacts on Bangladesh’s economy.

1. Slight Pressure on Dollar Exchange Rate

If banks continue purchasing dollars at higher rates, the interbank exchange rate may gradually move upward. This could make imports more expensive, especially for fuel, machinery, industrial raw materials, and essential commodities.

2. Increased Import Costs

Higher dollar prices directly affect importers. Businesses that rely on imported goods may face increased costs, which could eventually be passed on to consumers through higher product prices.

3. Inflationary Concerns

Since Bangladesh imports large volumes of fuel, edible oil, industrial inputs, and consumer goods, a stronger dollar often contributes to inflation. Rising import costs may create additional pressure on domestic prices.

4. Better Incentives for Remittance Inflows

A higher exchange rate can encourage expatriate Bangladeshis to send more money through formal banking channels instead of informal systems. This may support official remittance growth and improve reserve strength.

5. Pressure on Banking Sector Liquidity

Banks with heavy import payment obligations may experience temporary liquidity stress in foreign currency management. This can increase competition among banks for dollar collection.

Market Outlook

Analysts believe the next week will be crucial for Bangladesh’s forex market as large oil and gas import payments are processed. If remittance inflows remain steady and Bangladesh Bank continues reserve support, the pressure may remain manageable.

However, if import demand rises sharply or global fuel prices increase further, banks may need to offer even higher remittance rates to secure enough foreign exchange.

For now, the rise to Tk123 per dollar reflects cautious preparation rather than panic, but it also highlights how sensitive Bangladesh’s banking sector remains to large import settlements and remittance flow patterns.

The coming weeks will determine whether this is only a temporary adjustment or the beginning of another upward shift in the country’s exchange rate trend.

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