Bangladesh Bank has purchased $313 million from 22 commercial banks through an auction, in a bid to stabilise the foreign exchange market following a sharp decline in the US dollar rate against the taka.

A senior central bank official confirmed the cut-off rate for the transaction was Tk 121.5 per dollar.

The move comes just two days after the regulator bought $171 million from 18 banks in a similar auction, marking an unprecedented intervention under the country’s newly adopted floating exchange rate regime.

Officials said the foreign currency purchased on Tuesday will be added to the central bank’s reserves, which stood at $24.54 billion as of July 10, up from $21.06 billion a year earlier, according to the IMF’s BPM6 standard.

The recent measures are aimed at stemming the rapid appreciation of the local currency. The inter-bank exchange rate rose to Tk 121.5 per dollar today, up from Tk 120.1 on the previous trading day. The US dollar has been losing ground over the past week, prompting concerns among exporters and remittance earners.

However, some economists have raised concerns about the timing of the intervention. Zahid Hussain, former lead economist at the World Bank’s Dhaka office, argued that allowing the dollar rate to decline could have helped rein in domestic inflation.

“With inflation still high, a stronger taka could have provided relief,” he said. He suggested that reducing the rate to around Tk 110 might have significantly helped ease price pressures.