Taka Under Fresh Assault as Dollar Rockets Past Tk128

The US dollar has surged past Tk128 in Bangladesh's open market, exposing renewed pressure on the taka as rising import demand and higher global energy prices unsettle the foreign exchange market, foreign exchange dealers of commercial banks said.

The latest slide has widened the gap between official banking rates and curb-market prices, they said raising fresh concerns over import costs, foreign currency availability and the potential impact on domestic commodity prices.

According to Bangladesh Bank data, the dollar climbed to Tk124.22 in the interbank market on Thursday (October 29), while it traded between Tk124.35 and Tk124.50 in the interbank spot market on the same day.

The pressure intensified further by Saturday (October 31), when money changers in Dhaka's open market were selling the greenback at Tk128 to Tk128.20. Just 15 days earlier, the spot-market rate stood at Tk123.50 per dollar.

The sharp movement reflects growing strains across the foreign exchange market, with the open-market rate now substantially exceeding the prevailing banking rates.

Commercial banks, meanwhile, were paying Tk124.21 per dollar to settle international trade transactions and letters of credit (LCs), up from Tk123.11 at the beginning of October. The increase of Tk1.10 in a month has added to the cost of settling import bills.

People familiar with the foreign exchange market attributed the renewed pressure to rising global energy prices and increased demand for dollars to meet import payment obligations.

Renewed conflict and tensions in the Middle East have pushed up international fuel prices, increasing the dollar requirements of both public and private sector importers. Fuel and fertiliser imports, in particular, are adding to foreign currency demand.

At the same time, import payments exceeding export earnings are contributing to pressure on the foreign exchange market and complicating efforts to maintain exchange-rate stability.

The pressure is particularly visible in the open market, where dollar prices have climbed sharply over the past month.

Money exchange houses in Motijheel, Dhaka, were selling dollars at Tk128 to Tk128.20 on Saturday, while customers selling their dollars were receiving around Tk127.80, according to market sources.

A month earlier, the dollar was traded between Tk125.50 and Tk126.20 in the open market, indicating a substantial increase in the cost of purchasing foreign currency.

The widening gap between banking and open-market rates also highlights the continuing sensitivity of the foreign exchange market to changes in supply and demand.

The renewed depreciation of the taka could have direct consequences for the domestic economy. A higher dollar rate increases the local-currency cost of imported fuel, fertiliser, industrial raw materials, food commodities and capital machinery, potentially feeding into inflationary pressures.

Importers may eventually pass the additional costs on to consumers, putting further pressure on household budgets at a time when purchasing power remains constrained.

The impact is not limited to businesses. Families sending children overseas for education, patients seeking medical treatment abroad and people travelling internationally must now spend more taka to purchase the same amount of foreign currency.

With the dollar strengthening across different segments of the market, the latest surge has renewed concerns about the stability of the taka and the economy's vulnerability to external price shocks.