MediumIV Macro Policy & Sovereign Debt4 November 2026, Wednesday
Bangladesh's central bank sells reserve dollars to hold the taka at 124
Bangladesh Bank sold dollars from its reserves to banks by auction on 4 November; The Daily Star put the amount at $100 million, TBS at $120 million. The interbank rate held at 124.35 taka for two days running, and gross reserves fell to $36.43 billion.
According to TBS, the central bank opened the auction with $100 million, raised the amount by $20 million when bank demand proved strong, and sold in a range of 124.30–124.35 taka. The Daily Star gave the amount sold as $100 million and wrote that banks had to bid with a single offer of at least $500,000. Both sources agree that a $100 million auction called on 3 November was cancelled at the last minute. According to the Daily Star, a $122 million auction had also been held the previous week.
According to the Daily Star, the taka stood at 123 to the dollar at the start of October and 123.99 on the last business day of October, and moved past 124 this week. The rate held in a band of 121–122.30 for about 1.5 years after the fall of the Awami League government and has been rising since March 2026. Gross reserves peaked at $37.41 billion on 1 September and had fallen to $36.43 billion in the latest reported week.
The constraint is the energy bill. According to TBS, dollar demand rose in October because of public sector letter of credit payments; the Daily Star linked the sale in particular to higher costs for fuel and commodity imports. The Daily Star reported on 4 November that garment wage protests, now in their 4th day, had shut several hundred factories. Exports had grown by only 6% in the first 4 months of the fiscal year. With the sector that brings in foreign currency disrupted, the import bill keeps dollar demand up. A central bank official said he expected falling global oil prices and a weaker dollar to improve the situation.
Talay assessment
Bottom line
Bangladesh Bank has started using its reserves again to defend the currency. Sales of more than $200 million in two auctions in a week add to a reserve drain of about $1 billion since the September peak. Because the pressure comes from the fuel bill and public letters of credit, the auction series could continue unless oil prices fall. The most likely path is a slow drift of the rate within a 124–125 band, with reserves slipping below $36 billion.
Likely effects
- Bangladesh's reservesNegativeWeeks
If weekly sales of $100–120 million continue, gross reserves will fall below $36 billion within a few weeks.
- Garment exportsNegative1–6 months
Wage strikes are disrupting export earnings while currency drift raises the cost of imported inputs; the sector's foreign currency earnings are squeezed from both sides.
- InflationNegative1–6 months
The taka's depreciation adds pressure through fuel and commodity imports to inflation already close to 8.5%.
Possibilities, ranked
- 1Controlled drift55%
The central bank holds the rate in a 124–125 band with weekly auctions, and reserves erode slowly.
Watch: Bangladesh Bank's weekly gross reserve figures
- 2Oil brings relief25%
Global oil prices fall, dollar demand eases and auctions become less frequent.
Watch: Public letter of credit payments and November import data
- 3A currency jump20%
Strikes drag on, export earnings fall and the rate quickly breaks through 125.
Watch: The interbank rate exceeding 125 taka
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Dollars sold (4 November)▼ $100–120m
- Interbank rate▼ 124.35 taka
- Gross reserves▼ $36.43bn