Dhaka, July 20 -- Just a year after grappling with an acute dollar shortage that strained foreign reserves and destabilised the exchange rate, Bangladesh now finds itself on the opposite end of the spectrum - facing a surplus of US dollars that presents a fresh set of economic challenges.

Since the introduction of a flexible exchange rate regime on 14 May, the Bangladesh Bank (BB) has intervened to prevent the taka from appreciating too rapidly.

In July alone, the central bank purchased $486 million from the market within just three days, as the interbank exchange rate fell sharply from Tk122.80 to Tk119.70 - a Tk3 drop in one week.

The BB says these purchases aim to support exporters and remittance earners, who risk seeing reduced ret...