Bangladesh Bank dollar auctions are now a clear tool of FX-market smoothing. The stance firmed up as remittances surged in January 2026.
What Bangladesh Bank did in the FX market
Bangladesh Bank dollar auctions continued late in January with another spot-market purchase. The central bank bought $55 million from five commercial banks via auction. The cut-off rate was Tk 122.30 per US dollar.
The same reporting shows how persistent the intervention has become. Officials cited total January purchases of about $798 million. They also cited cumulative buying of about $3.93 billion in FY2025–26 up to that point.
Bangladesh Bank dollar auctions, in this phase, are meant to lean against sharp moves. This time the risk is a fast dollar drop, not a spike. That matters for exporters, importers, and bank balance sheets.
Remittances set the backdrop
January 2026 remittance inflows were reported at about $3.17 billion. Local reporting described this as among the highest monthly totals on record. Several outlets attributed the figure to Bangladesh Bank data and comments from its spokesperson.
High remittances add dollar supply to the banking system. That can reduce stress in the interbank market. It can also strengthen the taka if the market is left alone.
Bangladesh Bank dollar auctions can absorb that supply. The central bank can then add the purchased dollars to reserves, while paying taka into the system.
Why FX-market smoothing matters now
A steadier exchange rate feeds into inflation expectations. It also affects import costs quickly in Bangladesh. Fuel, food, and industrial inputs are all sensitive to the taka-dollar rate.
Bangladesh Bank dollar auctions also shape bank liquidity. When the central bank buys dollars, it injects taka. That can ease short-term liquidity pressures for banks. It can also influence money-market rates if the injections are large.
Recent coverage has framed the policy shift as notable. After years of reserve sales to support essential imports, the central bank has moved into net buying. One report noted Bangladesh Bank sold more than $25 billion from reserves between FY21 and FY25. Now it has been buying since the start of FY2025–26 as inflows improved.
Bangladesh Bank dollar auctions, in that sense, are a signal. They suggest a preference for stability and reserve rebuilding over allowing a sharp appreciation.
Market signals and the policy trade-offs
Bangladesh Bank dollar auctions can act like a market “floor” for the dollar rate. If banks know the central bank will buy at a stated cut-off rate, the market may cluster around that level. This can reduce day-to-day volatility.
There are trade-offs. If the taka is held too strong, exporters may face pressure on competitiveness. If it is held too weak, import-driven inflation can rise. Policymakers often try to avoid both extremes.
Remittance strength helps the central bank manage those trade-offs. It provides steady inflows that can cover import demand. It also supports reserve rebuilding without abrupt policy tightening.
Bangladesh Bank dollar auctions become more credible when inflows are broad-based. Reporting has linked the improved dollar supply not only to remittances, but also to exports and lower pressure in the FX market.
What to watch next
Several indicators will show whether Bangladesh Bank dollar auctions remain heavy in February and March.
The pace of remittances
If monthly inflows stay near January’s $3.17 billion, supply conditions may remain comfortable. That would allow continued reserve accumulation.
Import payment demand
A rebound in import LCs or energy payments can tighten the market fast. That would test whether the central bank switches from buying to selling again.
The auction cut-off rate
So far, multiple reports have cited Tk 122.30 as a key cut-off point. A change in that level would be a strong policy signal.
Bangladesh Bank dollar auctions will stay central to the story. They connect remittances, reserves, and price stability in a direct way.