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Bangladesh Bank has issued fresh instructions to banks in a bid to avoid any volatility in the forex market.
On Tuesday, it instructed commercial banks not to open letters of credit (LCs) for those without lawfully renewed Import Registration Certificates (IRCs).
In another notice on Monday, the central bank asked commercial banks to submit reports on all spot deals, alongside corporate ones, to the relevant departments of the central bank by 4pm each workday.
Earlier, the banks were allowed to submit reports on all spot deals among the banks on the inter-bank foreign exchange market to the central bank on a daily basis.
“The latest move comes because of a few allegations,” says one Bangladesh Bank official.
“Some commercial banks are opening LCs without valid and up-to-date IRCs. And the spot deals instruction was given because of another allegation, which is that some banks are selling the US currency to corporate entities for settling import-payment obligations by charging higher prices than the selling rates,” according to the official who prefers anonymity.
On the other hand, Executive Director and Spokesperson of Bangladesh Bank Md Serajul Islam says monitoring of foreign exchange reserves to meet export costs is a “routine” operation.
“As part of this, two new instructions have been issued,” according to him.
(DT)
