Why has the dollar price suddenly increased?

According to the latest data from Bangladesh Bank, on July 30 the exchange rate of the dollar stood at Tk 123.82 in the interbank market. On the same day, the dollar was sold at Tk 123.88 in the spot market, compared to Tk 122.85 a month ago. However, some commercial banks have to spend up to Tk 123.95 per dollar to settle LC liabilities.

Those concerned say the global market situation and the increase in the country's import costs are mainly creating fresh pressure on the dollar. Due to the ongoing war and tensions in the Middle East, fuel oil prices have risen in the international market. As a result, additional dollars are being spent on importing fuel, fertilizer and other essential goods.

Meanwhile, although import costs have increased, export earnings have fallen. According to Bangladesh Bank data, during July to May of fiscal year 2025-26, the country's imports increased by 6.26 percent to reach $64 billion. In contrast, export earnings during the same period fell by nearly 2 percent to $40 billion. As a result, expenditure has increased compared to dollar inflow, putting pressure on the foreign exchange market.

Remittance inflow, another major source of dollars, has also slowed somewhat. Although a record $35.59 billion in remittances came in the last fiscal year, the flow declined after Eid-ul-Fitr and Eid-ul-Adha. After six consecutive months of remittances exceeding $3 billion, it fell to $2.82 billion in June and $2.86 billion in July.

As demand for dollars increased in the market, banks began collecting dollars at higher prices. To control the situation, Bangladesh Bank recently issued verbal instructions to commercial banks not to buy dollars at more than Tk 123.82 from the interbank market or remittance channels.

Meanwhile, the dollar price increase in the banking sector has also impacted the open market. At various money exchanges in Motijheel, the capital, it was seen on Sunday that each dollar was bought at Tk 126 to Tk 126.40 and sold at Tk 126.70 to Tk 126.80. A month ago, the dollar price in the open market was between Tk 125 and Tk 125.20.

According to analysts, the combined impact of rising import costs, falling export earnings and a temporary slowdown in remittance inflows has created fresh instability in the country's foreign exchange market.