Major depreciation of Taka: Dollar rate hiked by Tk 2.85 in day

Bangladesh Bank (BB) has introduced a ‘market-based’ US dollar exchange rate, setting a cap on the maximum rate for H1 of the new fiscal year 2023-24.

The central bank is selling dollars to commercial banks at Tk 108.85 per dollar, increasing Tk 2.85 from the previous rate.

Through the regulator selling dollars at a market-based rate, the price of dollars in interbank transactions has also been fixed at a maximum of Tk 109.

However, the foreign exchange market is still volatile and banks are selling US dollars at different rates to clients on Tuesday (July 4), importers paid Tk 112 per dollar for LCs, which is against the competitive exchange rate formula.

Banks are taking higher rates for import LCs and the traders raised questions regarding whether the exchange rate is market-based or setting the willingness of banks.

A businessman, Rubayet Hossain, who went to open LCs at a private bank in Motijheel on Tuesday to import raw materials for an export-based industry, had to pay Tk 112 per dollar for LCs.

Despite the higher rate, Rubayet got half the amount of dollars that he required, and described to UNB the situation as annoying for business.

Earlier, Governor Abdur Rauf Talukder said that Bangladesh Bank will not sell any more dollars to the banks at a discount rate from FY 24. So, the dollars will be sold at market-based rates, at the highest price in the interbank transaction.

Besides, Bangladesh Foreign Exchange Dealers Association (BAFEDA) has fixed the maximum dollar rate of Tk 109 under the interbank exchange rate.

According to BAFEDA, from now on dealer banks will add one taka to the rate at which they buy dollars and will give the BC (bills for collection) selling rate.

However, this rate cannot be more than Tk 109. Banks now buy export bills at Tk 107.50 and remittances at Tk 108.50.

BAFEDA and the Association of Bankers, Bangladesh, or ABB, fixed the import price by adding a maximum of one taka to the average dollar buying price.