By curbing money laundering and reducing corruption, the supply of dollars in the interbank market has increased significantly.

This improvement has allowed Bangladesh Bank to repay $1.5 billion in foreign dues over the past two months without dipping into its reserves, sourcing the dollars from the interbank market instead.

Bangladesh Bank Governor Dr Ahsan H Mansur explained that while banks previously struggled with a dollar shortage, most now have a surplus of dollars. Though cash remains scarce, the supply of dollars is stable.

Expatriates primarily send remittances in dollars to banks, and export earnings are also deposited there first. Dollars accumulate in the banks, which then open Letters of Credit (LC) or sell the dollars to Bangladesh Bank when needed. The central bank purchases these dollars and adds them to its reserves.

Dr Mansur further clarified that while Bangladesh Bank routinely buys and sells dollars from commercial banks, it has not sold any from its reserves recently.