DHAKA, Aug 5, 2025 (BSS) – With the interim government completing one year after the changeover of power following the student-led mass uprising last year, the country's foreign exchange market is currently witnessing a strong condition due to healthy flow of inward remittances, a rise in export earnings alongside visible preventive measures against money laundering.

During this period, Bangladesh’s local currency, the taka, has regained strength against the US dollar as steady inflow of foreign currencies has driven down the exchange rate.

According to Bangladesh Bank data, the inter-bank selling rate of the dollar fell by Taka 2.20 over five days, reaching Taka 120.1 on July 14 from Taka 122.3 on July 9. The buying rate stood at Taka 119.5 on that day.

To prevent sharp fluctuations, the central bank has intervened in the market by purchasing $496 million from commercial banks till now.

Officials noted that while a stronger taka can help ease inflation, an overly rapid fall in the dollar rate may negatively affect exporters and remitters.

Due to BB’s intervention, the inter-bank exchange rate for selling the US dollar stood at Taka 122.89 on August 3, 2025.

Since the Covid-19 pandemic, the taka began weakening against the dollar in 2022 due to instability in the foreign exchange market, driven by turmoil in both global and local economies. Since July that year, the Bangladeshi currency has depreciated by about 30 percent.

Industry insiders attributed the recent appreciation of Taka to several factors -- a surge in remittance inflow which totaled $30.33 billion in FY 2024-25, a decline in illegal cross-border transactions as well as in money laundering, and the disbursement of funds from multilateral lenders.

To meet the conditions of a $4.7 billion loan programme from the International Monetary Fund (IMF), the central bank in May last adopted a more flexible exchange rate regime following months of stalemate.

Although bankers initially feared the move would fuel further depreciation, it helped stabilise the market instead, said a senior official of the Bangladesh Bank.

The stability also contributed to a rise in the country's foreign currency reserves, he added.

According to the Bangladesh Bank (BB) latest data, the country's gross reserves have risen to $30 billion by July 24, 2025. 

However, as per the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), Bangladesh's net reserves have currently stood at $24.99 billion.

Talking to BSS, Planning Adviser Dr Wahiduddin Mahmud said that there is increase in remittance inflow since there has been improvement in the balance of payments side by side the Taka-Dollar exchange rate has also remained in a stable state.

He said the decision to make the exchange rate as market-based did not cause any difficulty, rather the exchange rate did not become volatile at all brushing aside the concerns from many.

“We made the exchange rate as market-based of our own considerations although it was the prescription of others (IMF) …  the confidence on Taka has been increasing,” he added.

Dr Mahmud opined that the inward remittance through legal channel has been increasing since there is no speculation now of abruptly increasing the dollar price for which the expatriates have no such tendency of holding up the remittances.

Talking to BSS, General Economics Division (GED) member of the Planning Commission Dr Monzur Hossain said that the exchange rate remained stable between mid-June and early July 2025, fluctuating only slightly within the Tk.122.45–Tk. 122.70 per USD range. 

“This currency stability supports trade planning and business confidence. Altogether, Bangladesh's external sector reflects steady performance and sound policy management, while offering clear opportunities for structural improvements and export diversification,” he added.

Bangladesh Bank Executive Director and Spokesperson Arif Hussain Khan said that the dollar's falling trend was not a positive sign for the market, prompting the regulator to step in.

“We want to keep the forex market stable, because both a rise and a fall are not good indicators,” he said, adding, “If the dollar becomes weak too much, exporters and remitters feel discouraged and suffer losses.”

The country's export earnings, during the last fiscal year 2024-25, witnessed an 8.58 percent growth raising the total volume to $48.28 billion, which also indicated that the country was now going well through an economic recovery phase that was also helping Taka stronger against US dollar.

Bangladesh's exports rose 25 percent year-on-year to $4.77 billion in July this year, driven by strong and consistent growth in the readymade garment (RMG) sector, the country's top export earner.

Bangladesh exported $3.81 billion in July 2024.

In July alone this year, RMG shipments grew 25 percent year-on-year to $3.96 billion, according to Export Promotion Bureau data.

Arif Hussain Khan said around one year ago, the interim government came to power, promising to bring changes across the board.

“A number of policy measures have been taken to reform the national economy, organizations, administration, and thus establishing a strong system of fostering public spirit,” Arif Hussain Khan.

Administrator to the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md Hafizur Rahman said that widespread problem that prevailed in opening up of LCs during the past regime, now does not exist while the importers can now easily open up LCs since there is no crisis now with the availability of dollars as well as with the exchange rate.

“The importers are not under any concern now (opening of LCs) and it’s a good sign,” he added.

Deputy Managing Director (DMD) of the Premier Bank PLC Abdul Quaium Chowdhury said since August, 2024, remittances have consistently increased, providing the interim government a respite on exchange rate.

This has evolved as a critical economic relief for a nation that was suffering from macroeconomic strains, he added.