The apex body of local dealer banks has decided to tell its members to maintain a benchmark in quoting foreign currency exchange rates to overseas exchange houses engaged in remitting money.
The move, sources said, was to rein in on the ongoing exchange rate volatility in the country's money market.
The decision was made in an emergency meeting of the Bangladesh Foreign Exchange Dealers' Association (BAFEDA) executive committee, held in Dhaka on Wednesday with its chairman Ataur Rahman Prodhan in the chair.
Under the decision, the exchange rate for overseas exchange houses to be quoted by the banks will be less by Tk0.10 per US dollar from the inter-bank rate.
Prodhan, also managing director and chief executive officer of state-owned Sonali Bank, said the BAFEDA will send a letter with some suggestions to its members and the Bangladesh Bank as early as possible.
BAFEDA made the latest move to ensure a healthy competitive atmosphere on the forex market by introducing a uniform-rate-quoting system to the overseas exchange houses.
Currently, some commercial banks are quoting unusually high rates to the overseas exchange houses to attract more inward remittances and these rates are also responsible for creating the market volatility, according to market insiders.
They also said some banks offer higher rates ranging between Tk91-94 for netting remittances from the overseas exchange houses bypassing the inter-bank rate or BC (bills for collection) selling rates.
The US currency was quoted at Tk87.50 each on the inter-bank market on Wednesday, unchanged from the previous level, while the rate for the sale of bills for collection, generally known as BC, was Tk86.75.
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.
Sources, however, said the BAFEDA will also request its members to avoid encashment of export proceeds of other banks' clients to avoid market waywardness.
On the other hand, the central bank is providing the foreign-currency liquidity support to the banks continuously on a priority basis to settle their import-payment obligations.
As part of the remedial move, Bangladesh Bank sold $80 million directly to six scheduled banks on Wednesday to help in settling import payments.
The central bank has so far sold $5.39 billion from the reserves directly to the commercial banks as liquidity support for settling their import-payment obligations in the current fiscal year 2021-22.
Bangladesh's market witnessed a volatile situation mainly due to higher outflow of foreign exchange following 'hefty growth' in import payments compared to the inflow in the last few months.
Meanwhile, the exchange rate of cash dollar against the local currency on the open market, known as kerb market, eased slightly, pushing down below Tk100 on Wednesday.
The US currency rate came down to Tk97 each on the day from Tk102 of the previous day, currency traders said.
Sources, however, said that the demand for cash dollars eased slightly on Wednesday because of the higher price of the greenback on the kerb market.
The rate of the greenback may rise ahead of the upcoming holy Hajj if the lower supply of the US currency to the market continues, they predicted.