Bangladesh dollar demand rises as fuel import payments pressure taka

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Bangladesh dollar demand rises

Highlights

Commercial banks paid Tk125.10–Tk125.15 per dollar at exchange houses as strong import demand, fuelled by higher energy import bills, pressured the taka.
Petroleum import costs rose 27.87% to $2.98 billion in July–September, with petroleum, oil and lubricant import expenditure surging 103% to $3.71 billion year-on-year.
Government fuel and consumer goods import payments—including $800 million needed by BPC in November and increased Ramadan LCs—are sustaining high dollar demand despite $30.80 billion in remittances YTD.

Fuel import bills intensify currency pressure

As reported by The Business Standard, several commercial banks bought dollars from exchange houses at Tk125.10 to Tk125.15 yesterday, while letters of credit were settled at Tk124.90 to Tk124.97 per dollar. The remittance purchase rate has risen by more than Tk2.30 over the past three months, and the central bank's sale of $122 million from reserves last week has not been enough to ease market pressure.

Bangladesh Bank officials and bankers say the pressure is being driven mainly by rising payments for government fuel and petroleum imports. Since the Middle East war broke out in March, fuel prices have surged, with Bangladesh Petroleum Corporation importing fuel at about $148 per barrel, compared with less than $90 before the conflict. A senior central bank official says BPC will need around $800 million for import payments in November.

Central bank data show total import expenditure rises 15% in the first quarter of FY26, covering July to September. Petroleum import costs increase 27.87% to $2.98 billion from $2.33 billion a year earlier, while petroleum, oil and lubricant import expenditure surges 103% to $3.71 billion from $1.82 billion.

Trade payments and Ramadan imports keep market on edge

Bankers say BPC and Petrobangla also face sizeable payment obligations this month, adding to demand for dollars across the banking system. Bangladesh Bank wants to keep the dollar rate below Tk125 because further depreciation would increase import costs and add to inflationary pressure.

External inflows remain substantial but have not fully offset import demand. Remittances reach $30.80 billion in the first 10 months of this year, while exports stand at $41.09 billion and imports at $64.95 billion, according to Bangladesh Bank and Export Promotion Bureau data. Between July and 9 November, remittances total $12.75 billion, up from $11.12 billion a year earlier, but monthly inflows stay below $3 billion for five straight months.

Bankers add that government payments and letter of credit settlements for consumer goods imports ahead of Ramadan in February are set to add more pressure this month. In October, LC settlements total $5.95 billion, while new LCs worth $7.32 billion are opened.

We have previously noted how surging oil tanker rates are lifting fuel and consumer costs amid conflict-related shipping risks.

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