Bangladeshi Taka Rebounds Against US Dollar and Indian Rupee

After a prolonged, five-and-a-half-year period of sustained depreciation, the Bangladeshi taka is demonstrating renewed resilience against major international currencies, signalling a strategic shift in the nation’s foreign exchange landscape.

Central bank figures released by Bangladesh Bank confirm that the Bangladeshi taka (BDT) reached its strongest trading level against the US dollar in several years during the second half of 2026. On a point-to-point basis, the taka appreciated by 0.06 per cent against the greenback between June 2025 and June 2026. The pace of recovery accelerated markedly toward the end of summer. Between 30 August and 17 September, the local currency surged by an additional 0.77 per cent, pushing the official exchange rate down from Tk 123.95 per dollar to Tk 123.00.

The importance of this turnaround becomes clear when set against the backdrop of recent monetary trends. In 2021, the US dollar traded at Tk 85.80. Heightened import expenditures, rising global economic pressures, and elevated demand for foreign currency triggered a protracted decline. At its lowest point, the taka hit Tk 123.95—reflecting a loss of nearly 45 per cent of its value against the dollar. The reversal that began in late August has since stabilised. Central bank spot reference figures on 21 September recorded the rate at Tk 122.9951, while the weighted average across the interbank market closed at Tk 122.74.

Robust remittance inflows from overseas workers and improving foreign exchange reserves have provided critical support to the currency. Gross international reserves, calculated under the International Monetary Fund’s BPM6 standard, rose to $31.36 billion in early September 2026, up significantly from $25.68 billion a year earlier—a gain of $5.68 billion.

Despite these positive developments, underlying market demand for foreign currency persists. To manage ongoing import commitments, Bangladesh Bank stepped in on 14 September, selling $11.50 million to six commercial banks. This intervention, the central bank’s first in 14 months, underscores the need for active oversight to maintain equilibrium between supply and demand.

Beyond the US dollar, the taka has also made gains against the Indian rupee. Historically, purchasing 100 Indian rupees required nearly Tk 140. That figure has dropped to between Tk 128 and Tk 130, with 1 Indian rupee trading at approximately Tk 1.28 on 21 September.

This regional cross-rate shift is largely driven by broader weakness in the Indian currency. Central bank analysis indicates that the Indian rupee depreciated by 9.5 per cent against the US dollar between June 2025 and June 2026. Across the wider region, the Sri Lankan rupee slid over 10 per cent and the Indonesian rupiah fell roughly 9 per cent during the same timeframe, whereas the Malaysian ringgit and Chinese yuan both strengthened by about 4 per cent.

A firmer local currency offers tangible benefits for import-dependent sectors by lowering the domestic cost of imported fuel, raw industrial inputs, and capital equipment. It also reduces the local-currency burden of servicing foreign debt commitments. However, monetary authorities must balance these advantages against potential challenges for exporters, whose dollar earnings yield lower returns when converted into local currency. Whether this recent stability marks a permanent trajectory will depend on remittance sustainability, export earnings, import demand, and broader global economic dynamics.