To stabilize the foreign exchange market, bankers have decided to cut the purchase and selling rates of the US dollar by Tk 0.25 per dollar.
This decision, effective from December 3, will see banks buying each dollar at Tk 109.75 from remitters and exporters and selling each at Tk 110.25 to importers.
The interbank exchange rate will also be set at Tk 110.25 per dollar. The decision comes as some exporters are delaying the realization of export proceeds and local syndicates are holding on to cash dollars in anticipation of a further rise in the USD rate. By cutting the USD rate, bankers aim to send a message to the market that the USD rate will not always rise against the taka.
This follows a recent meeting between Bangladesh Bank (BB) governor Abdur Rouf Talukder and bank executives, where the governor expressed concerns about the drop in export realization in recent months. According to the central bank’s provisional data, Bangladesh received $10 billion in export proceeds from July to September of this fiscal year, down from $13 billion in the same period of the last fiscal year. In an effort to address this issue, the BB had directed banks to realize the previous export proceeds by 31 October.
However, these rates have not been effective in the market, as banks continue to trade foreign currency at a higher rate. Former central bank chief economist Mustafa K Mujeri has pointed out that the rates set by Bafeda-ABB are not reflective of actual market transactions.
In response, the central bank has been buying up excess dollars from banks, purchasing $70 million from Islami Bank on Monday and Tuesday.