Devaluation continues: US dollar rate fixed at Tk92

The value of taka has decreased once again against the US dollar as the Bangladesh Bank sold dollars to banks at a rate of Tk92 on Tuesday, an increase from Tk91.95 on Monday, marking the third devaluation of the local currency against the greenback in the last three days.

Sirajul Islam, a spokesperson and executive director of the central bank, has confirmed the information to The Business Standard.

In addition, a central bank source said the money market regulator at a meeting asked the managing directors of public and private banks to be vigilant about irregularities in the sale of dollars.

At the same time, Bangladesh Bank Governor Fazle Kabir has expressed his interest in holding meetings with the bankers regarding their demand over the appreciation of the dollar, the source added.

A senior official at the central bank has said that it is devaluing the taka to keep pace with the rising dollar. He said the current market price of the dollar is between Tk93 and Tk94.

The Bangladesh Bank has raised the interbank exchange rate even though the dollar has been left in the hands of banks so that remitters and exporters benefit, the official added.

Another senior official of the Bangladesh Bank said $129 million was sold to banks on Tuesday.

However, a number of treasury officials at several private banks said the banks have opened letters of credit (LCs) for import at rates ranging from $92.75 to Tk93. However, there are some banks which have charged importers Tk94 per dollar for LCs.

The head of the treasury department at a leading private bank told TBS that importers have increased LC opening rates amid fears that the dollar may rise again. As a result, there is a dollar crisis in the market.

At the beginning of January, the central bank raised the exchange rate of the US dollar from Tk0.20 to Tk86. Later it was fixed at Tk86.20 on 23 March, at Tk86.45 on 27 April and at Tk86.70 on 9 May.

The dollar has been appreciated several times in May this year. The dollar price was raised to Tk87.50 on 16 May, to Tk87.90 on 23 May and to Tk89 on 30 May.

This trend continues in June. On 2 June, the dollar rose to Tk89.90. Later on Thursday, the price was increased by Tk1.60 to Tk91.50 and on Monday it was fixed at Tk91.95. Since January this year, the US dollar has gained by Tk6.2 or 7.23% in interbank transactions.

Meanwhile, the country's foreign exchange reserves are fluctuating between $41 billion and $42 billion, according to the Bangladesh Bank. Last Monday, the central bank's reserves were $41.89 billion.

Bank MDs warned  about irregularities in dollar sales

There was a discussion on the dollar at a meeting of BIBM's governing body at the boardroom of the Bangladesh Bank on Tuesday. Central Bank Governor Fazle Kabir, Deputy Governor Kazi Saidur Rahman and MDs of the country's leading public and private banks were present there.

According to a source in the meeting, the managing directors of several banks have demanded an increase in the value of the dollar. They said the banks had collected dollars from exchange houses at a rate of Tk95-96. As a result, they also claim that they are losing money by opening LCs at low prices. Besides, the banks also suffered from a dollar crisis on Tuesday, said the MDs.

However, bankers are not interested in uniform rates. According to them, if the price is fixed in this way, the banks with low remittance or export income will have to suffer.

The source further said that Deputy Governor Saidur Rahman has warned of action against the managing directors of banks concerned if they find any irregularities in the sale of dollars.

The source confirmed that the central bank governor has expressed interest in meeting with banks' MDs to resolve the ongoing crisis over the dollar rate and find a lasting solution.

Earlier on 26 May, the central bank held a meeting with the leaders of the Association of Bankers, Bangladesh and the Bangladesh Foreign Exchange Dealers Association to resolve the dollar crisis.

It was also decided that all banks there would sell dollars at the same rate. But, as most of the banks did not comply with this rate, on June 2, the Bangladesh Bank left the exchange rate on the market.