Banks choose not to pay more than Tk 123 for each US dollar

Bangladeshi banks have decided not to pay more than Tk 123 to purchase US dollars from remittance sources. This decision follows a directive from the central bank.

The move comes as the dollar's exchange rate surged to Tk 126-127. Importers have been compelled to buy dollars at inflated prices due to banks purchasing dollars at higher rates, driving up the cost of imported goods. Treasury heads from several private banks confirmed this. The dollar market has remained unstable for the past two years.

After the fall of the Awami League government, the interim government implemented measures to stabilize the exchange rate, temporarily calming the market. However, over the past month, the market has become volatile again as authorities mandated clearing all import liabilities by December, increasing dollar demand.

Some banks resorted to buying dollars at Tk 126-127, prompting the central bank to take a stricter stance. Consequently, banks agreed not to exceed Tk 123 per dollar. Following this decision, dollars from remittance income were purchased at rates up to Tk 124.5, leading to a drop in dollar prices.

Recently, the central bank demanded explanations from two state-owned and 11 private banks for purchasing dollars at inflated rates from foreign exchange houses. This pressure caused banks to lower dollar prices.

The rising dollar prices have contributed to remittance income surpassing the USD 2 billion mark in just 21 days. Although monthly remittance income has consistently exceeded USD 2 billion since the interim government assumed office, this is the fastest pace to reach the milestone.

Amid the high inflow of remittance income, the central bank has been purchasing dollars from commercial banks, boosting foreign exchange reserves. As of Monday, reserves stood at USD 24.98 billion. However, using the BPM 6 calculation method recommended by the IMF, the reserve was reported at USD 20.16 billion.