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Bangladesh’s forex dealers’ body will fix market-driven exchange rate daily for overseas exchange houses, as the central bank is in a drive to enforce discipline in dollar dealings.
Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) seeks active support of the central bank to maintain a uniform rate for the exchange houses.
The decision was made at a meeting of the technical committee of BAFEDA held Wednesday at its office in Dhaka with its Chairman Ashim Kumar Saha in the chair.
As per the decision, the committee will recommend to the executive body of the trade-promotion organization for taking necessary measures in this connection.
“We’ve taken the initiative in line with the latest bankers’ meeting decision,” a senior member of the committee told the FE after the meeting.
The latest bankers’ meeting was held at the central bank headquarters on July 25 with Bangladesh Bank (BB) Governor Abdul Rouf Talukder in the chair.
The BAFEDA will fix a uniform rate for the overseas exchange houses considering the market situation for its members each working day, according to the decision.
BAFEDA’s member-banks will follow the rate for receiving inward remittances through the overseas exchange houses, which are engaged in remitting money to Bangladesh.
“All the authorized dealer (AD) banks will maintain the uniform rate for the overseas exchange houses if the central bank extends its support properly,” the member, also treasury head of a leading private commercial bank (PCB), said while explaining the necessity of the central bank’s cooperation.
Actually, most of the banks are now quoting high rates to the overseas exchange houses bypassing inter-bank foreign-exchange (forex) market rate to attract more inward remittances for settling import-payment obligations, according to market insiders.
Earlier, the central bank had asked the bankers to quote foreign- currency exchange rates to the overseas exchange houses after applying due diligence and considering the situation on the inter-bank forex market.
The US currency was quoted at Tk 95.00 each on Wednesday– unchanged from the previous level–while most of the banks offered maximum Tk 110 to the overseas exchange houses for receiving inward remittances, they added.
At the same meeting, the BAFEDA Technical Committee also discussed providing weighted average rate of cash dollar to the Moneychangers’ Association of Bangladesh each working day.
The BAFEDA will be able to provide normal cash dollar rate of its member banks instead of weighted-average one to the association every working day.
“We’ll provide the weighted average rate on cash dollar to the association on following day,” another member of the committee said.
Earlier on August 17, the central bank allowed the moneychangers to make profit worth maximum Tk 1.50 between buying and selling of cash US dollar.
In that case, the moneychangers will have to collect weighted average rate of cash dollar from the BAFEDA each working day.
Meanwhile, the central bank continues to provide its foreign-currency support to scheduled banks for managing the forex-market volatility.
Under the ongoing moves, the BB sold $50 million more directly to three state-owned commercial banks on Wednesday to help them meet a growing demand for the greenback as global price rises have led to import-cost escalation with its resultant pressures on reserves of Bangladesh, as also of many other countries.
The BB has so far injected $2.04 billion from the reserves directly into commercial banks as liquidity support for import payments in the current fiscal year (FY), 2022-23.
In FY22, the central bank sold $7.62 billion from the reserves to the banks for the same purpose.
Bangladesh’s forex reserves came down to $39.35 billion on Wednesday from $39.42 billion of the previous working day following higher sales of dollar to feed the market.
(FE)
