Bangladeshi taka weakens as banks rush to settle letters of credit before month-end

The US dollar strengthened against the Bangladeshi taka on Monday as local banks faced heightened payment pressure ahead of the June quarter-close.

Financial institutions are rushing to settle outstanding letters of credit (LCs), driving up demand for foreign currency in the domestic market.

City Bank, one of the country's largest lenders, reported a rise in the exchange rate as it navigated the surge in settlement requests.

City Bank, one of the country's largest lenders, reported a rise in the exchange rate as it navigated the surge in settlement requests.

The move reflects typical end-of-month liquidity dynamics in emerging markets, where importers and banks compete for limited dollar supplies to meet contractual obligations.

This local depreciation occurs against a backdrop of significant global strength for the US currency.

The dollar index is on track to record its strongest monthly performance in nearly a year, with a projected 2.5% gain for June.