According to a directive provided in a circular issued on Thursday by the Foreign Exchange Policy Department of the central bank, money exchanges may maintain a maximum of Tk50 lakhs on hand from now on.
The amount of cash that money changers in Taka can hold was not previously disclosed, according to a central bank official.
Since there was no restriction on how much money a money changer might keep on hand each day, the banking authority made the decision primarily to address hundi.
This directive comes following several allegations of money exchanges being involved in illegal money transfers through Hundi, which has lowered remittances coming through the official channels.
The maximum amount of foreign currency in a money exchanger's cash account at day's end cannot exceed $25,000 or its equivalent, under the Foreign Exchange Transactions Guidelines.
If the institution's cash balance exceeds this cap, it must be deposited in the foreign currency account of the appropriate bank at the end of the day.
That account's balance cannot at any time be greater than $50,000 or it's equivalent.
Due to the continuous instability in the foreign currency market, the price of the US dollar has increased to Tk120 in the local open market.
Money changers have also been accused of manipulating the exchange rate in the open market.
The central bank and law enforcement organizations conducted raids and closed down unauthorized establishments in April when the dollar price on the open market dramatically jumped in comparison to the inter-market.
