Photo: Collected
Bangladesh’s currency is now in its strongest position against the US dollar in the last five and a half years. Pressure on the taka has eased as remittance inflow has increased, the foreign exchange liquidity situation has improved and reserves have risen. This has created a new picture of stability in the country’s foreign exchange market.
According to Bangladesh Bank’s latest report, the value of the taka against the dollar rose by 0.06 percent on a point-to-point basis in the one year from June 2025 to June 2026.
From 30 August to 17 September this year, the value of the taka rose by a further 0.77 percent. During this period, the dollar exchange rate fell from Tk 123.95 to Tk 123.
With this, the change in the trend of the taka’s value that had run for five and a half years has become clearer. Central bank data say the dollar rate was Tk 85.80 in 2021, which rose in phases to reach Tk 123.95. However, in the second half of this year, that trend has begun to turn in the opposite direction.
In this regard, Md Ali Hossain Prodhania, chairman of NRBC Bank and a financial sector analyst, said the strengthening of the taka, alongside the rise in remittance inflow and reserves, will help increase stability in the country’s external sector.
He said the supply of foreign exchange through formal banking channels is also increasing as remittances rise. At the same time, the country’s capacity to pay for imports and other external liabilities is increasing as reserves rise.
In his view, ‘this will create a positive image of the country among foreigners and importers’. If the exchange rate becomes more stable, the confidence of foreign investors and businesspeople involved in international trade will also grow.
Ali Hossain Prodhania said that as the taka strengthens, costs in local currency for fuel, food, industrial raw materials, machinery and other import inputs will fall. This will make it easier for businesspeople to manage import costs, and cost pressure in the country’s domestic market may also ease.
He said that even if commodity prices remain volatile in the international market, inflationary pressure may also ease somewhat if comparatively fewer taka are spent against dollar payments for imports.
In his view, as the availability of foreign exchange increases, opening legitimate letters of credit (LCs) and settling liabilities will also become easier for importers. It will be possible to avoid the pressure that had earlier been created on external payments due to the dollar crisis.
Describing the steady growth of remittances as important, he said it is working as a stable source of the country’s foreign exchange and strengthening the balance of payments.
However, he stressed increasing remittance and export earnings, caution in import management and steadily building up reserves in order to keep the taka’s exchange rate stable. In his words, ‘I hope this trend will continue.’
Arief Hossain Khan, spokesperson and executive director of Bangladesh Bank, told BSS that the position of the country’s external sector has improved as a result of the increase in remittance inflow, the improvement in the foreign exchange liquidity situation and close monitoring of foreign exchange transactions.
He said Bangladesh Bank is closely monitoring remittance inflow, import payments and foreign exchange transactions. Through this, it is being ensured that the additional supply of dollars is properly reflected in formal banking channels and that legitimate demand for foreign exchange is met smoothly.
At the same time, transactions are also being kept under watch to prevent money laundering, trade-based financial irregularities and abuse of the foreign exchange market. Regular supervision of banks and authorised dealer branches is also continuing.
On remittances, Arief Hossain Khan said the foreign exchange liquidity situation is improving and the country’s external position is also strengthening as expatriate income through formal channels increases.
On imports, he said the central bank is closely monitoring import-related foreign exchange transactions to prevent irregularities alongside meeting genuine import demand.
Arief Hossain Khan said Bangladesh Bank bought foreign exchange from various banks when foreign exchange liquidity in the market was rising. This has also helped rebuild the reserves that had fallen during the earlier crisis period.
In his view, the strong position of reserves and the increase in foreign exchange liquidity are positive for the currency market. At the same time, it has also increased the country’s capacity to pay for imports and other external liabilities.
According to Bangladesh Bank data, the country received $7.702 billion in remittances from 1 July to 19 September of the current 2026-27 fiscal year, which is 13.8 percent higher than in the same period of the previous year.
There has also been significant growth in reserves. On 8 September, the country’s gross foreign exchange reserves stood at $36.44 billion, which was $24.86 billion in September 2024. That is, reserves have risen by 46.6 percent in two years.
During the same period, Bangladesh Bank’s reserves calculated under the BPM6 method rose by 58.8 percent to stand at $31.53 billion.
This recent gain in strength by the taka is important for the economy. Because, if the taka remains comparatively strong, costs in local currency for imported goods such as fuel, food, industrial raw materials and machinery fall. Pressure in taka terms also eases in the case of repaying liabilities taken in foreign currency.
The recent appreciation of the taka, along with the increase in remittance inflow, foreign exchange liquidity and reserves, is indicating a strengthening of the country’s external sector. With this, the capacity to maintain stability in the foreign exchange market is also increasing.
