A decision to strictly monitor the price of the dollar

The forex market has been volatile for the past several months; Especially at the dollar price. Bangladesh Bank has decided to strictly monitor the dollar price to curb this instability. Basically, the central bank is going to take steps to reduce the value of the dollar by increasing the flow of foreign currency to the banks. According to the decision, banks will be able to sell dollars at a maximum of Tk 120 for payment of import debt and opening of new LCs. No bank will charge more than that.

In these sectors, the price per dollar is currently kept from 120 to 125 taka depending on the bank. As per the new decision, the price will be reduced by Rs 5 from the maximum level; Which will help to reduce import cost to some extent. Naturally, if the prices of imported goods come down, the pressure on inflation will also be reduced to some extent. However, the banks will follow the central bank's policy in selling dollars in advance.

In this case, the banks will charge interest on the basis of the period as per the policy. However, banks will follow the prevailing policy in selling cash dollars or travel dollar drafts.

This decision was made in the meeting held between the officials related to dollar sales of commercial banks and the heads of treasury department on Thursday (August 29) night. The heads of treasury of almost all banks belonging to Bangladesh Foreign Dealers Association (BAFEDA), an organization of banks licensed by the central bank for foreign exchange trading, were present in the meeting.

After reviewing the market situation in the meeting, it is said that the flow of dollars has increased in the banks. Doubts and fears about the dollar crisis have also reduced quite a bit. Inflow of remittances, foreign grants, export earnings have increased. Chief advisor to the current interim government. It will be possible to increase the flow of foreign investment and foreign credit by using the reputation of Yunus.

Besides, since the new government took over, the uncertainty in the economic and political sectors has also reduced a lot. For these reasons, the banks will keep the price at 120 rupees in case of sale of dollars. No bank will sell dollars for more than that. Banks which are still selling dollars above 120 rupees will also bring the price down to 120 rupees quickly.

Earlier, messages were sent from the central bank to the commercial banks to bring more stability to the foreign exchange market. It is said that any irregularities will not be tolerated. Treasury chiefs held the meeting after receiving such a message. Apart from payment of import debt and opening of new LCs, the treasury chiefs have decided to make inter-bank dollar transactions within a maximum of 120 rupees. At present, the dollar is being sold at the maximum price of 120 rupees in the interbank.

Meanwhile, many people have raised the question, how to buy dollars from the interbank for 120 taka and then sell it to the customer for 120 taka? According to them, it will cause loss to the bank.

According to the Foreign Exchange Act, no bank can incur a loss on sale of dollars. Because earlier some banks had to sit on their way due to huge losses in selling dollars. That is why the central bank has made this provision. In this situation, if you buy from the interbank for less than 120 taka, you can sell it to the customer for 120 taka. But now the maximum and minimum price of dollar in interbank is fixed at 120 rupees. In order to implement the discussed decision, the interbank dollar price should be reduced by 10 to 20 paise or more.

In the meeting, it was decided to buy remittance dollars at a maximum of 120 rupees. Henceforth no bank will offer remittance dollar price above Rs.120 to foreign exchange houses. At present, many banks are buying remittances from 122 to 124 rupees. As a result, some banks will be forced to reduce the dollar value of remittances. Then it is also asked to keep an eye on whether the remittance flow decreases or not.

Concerned people have raised questions in this regard. They say, if the remittance dollar is bought at a maximum of 120 taka, how can it be sold for 120 taka? How will the bank's operating expenses in this sector be met? Hence, the dollar value of remittances should be reduced to some extent. Apart from this, expatriates should be given benefits by reducing prices. Earlier, banks used to give a maximum incentive of two and a half percent to expatriates against every dollar of remittance from their own funds. Now almost all banks have given it away. Only the public sector's 2.5 percent incentive remains in place.

To solve these problems, the central bank says that banks are now buying 118 taka from 12 paisa to a maximum of 119 taka per dollar of export income. Banks are making good profits by buying and selling dollars at this price. With that profit the dollar price can be adjusted in other sectors.

Besides, according to the policy, the banks can slightly increase the price according to the term in case of forward dollar sale. It has been asked to sell dollars according to that policy. Meanwhile, the Central Bank has also issued rules to fix the price of the dollar at a maximum of Tk 120 under the crawling peg. As a result, the banks have also decided to sell dollars within that policy.