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The currency of Bangladesh has depreciated further against the US dollar, hitting Tk 95 on the interbank platform yesterday.
The exchange rate was Tk 94.70 per dollar on Sunday. With yesterday’s decline, the local currency has depreciated by 12.02 per cent in the platform in the last one year.
The escalation of import payments against lower export earnings has created volatility in the foreign exchange market in recent months.
Import payments amounted to $82.49 billion in FY22, up 36 per cent year-on-year, while export earnings grew 33.45 per cent to $49.24 billion.
In addition, the amount of remittance also came down 15 per cent to $21.03 billion in the last fiscal year.
These developments have created a shortage of greenbacks, destabilising the foreign exchange market in the process.
The higher outflow against the lower inflow of dollars also reduced the volume of the country’s foreign exchange reserves, which stood at $39.66 billion as of August 3 compared to $46.15 billion on December 30 last year.
A managing director of a commercial bank, on condition of anonymity, said the majority of banks are now facing a dollar shortage to settle foreign exchange related transactions.
Against this backdrop, lenders are now mobilising remittance from exchange houses abroad by paying up to Tk 112 per dollar to settle their import bills, he added.
The central bank yesterday injected another $139 million into the forex market to bring back stability. As such, it has supplied more than $1,300 million to the market between July 1 and August 8 this fiscal year.
The country’s interbank foreign exchange market has been becoming inoperative for the last couple of months due to the large gap between the interbank rate and rates quoted by banks.
The managing director went on to say that Bangladesh Bank should give effort to make the interbank platform vibrant so that banks can buy and sell greenbacks among each other to fulfil their instant demand.
“But instead, the central bank frequently sets the interbank rate by giving verbal instructions to keep the exchange rate of the taka high artificially,” he said.
The local currency yesterday also saw a sharp dive in its value against the greenback in the open market as the general public now have to pay up to Tk 115.50 per dollar in contrast to Tk 112 on Sunday.
It was alleged that a group of people are hoarding dollars by purchasing them from the open market, creating a volatile situation in the process.
The central bank is now conducting sudden inspections of money changers to bring back stability in the open market.
The licenses of five money changers have already been suspended due to their alleged involvement in anomalies.
(TDS)
