Bangladesh raises bank foreign-currency limits for large import payments

Bangladesh Bank has begun raising selected commercial banks’ foreign-currency exposure limits for the first time since the 2022 dollar crisis, The Business Standard reported Oct. 26.

The changes increase banks’ permitted net open position (NOP), the difference between foreign-currency assets and liabilities under regulatory calculations. Higher limits give eligible lenders more flexibility to accumulate dollars before large import payments fall due.

One bank’s limit rose from $39 million to $80 million. Eastern Bank has applied for an increase from about $40 million to $70 million, while City Bank has also requested a higher limit. Those applications are distinct from approved increases.

Bankers said the changes could reduce sudden demand for dollars. However, higher limits do not create foreign currency, and larger positions can increase exposure to exchange-rate movements or encourage dollar hoarding without effective supervision.