A unified exchange rate of the US dollar will be in motion from Sunday for all banks, to help overcome the volatility that persists in the foreign exchange market.
The decision was announced at a tripartite meeting between the Bangladesh Bank, Bangladesh Foreign Exchange Dealers Association (Bafeda) and Association of Bankers, Bangladesh (ABB) on Thursday.
Central bank governor Fazle Kabir was present at the meeting, along with Selim RF Hussain, ABB chairman and managing director of Brac Bank, and Bafeda chairman Ataur Rahman Pradhan, who is also the managing director of state-owned Sonali Bank.
ABB and BAFEDA will set the exchange rate everyday and take verbal consent from the Bangladesh Bank, said meeting source.
Currently different banks have different exchange rates.
Also at the meeting, it was decided to fix a rate on remittance this time to overcome the dollar crisis.
As a result, no bank will be able to collect foreign remittance at a higher price.
Besides, exporters have to cash the bills through their own banks. The banks will jointly determine the value of the dollar; which will also be applicable for remittance and export bill rates.
The meeting also decided that exporters can encash their foreign earnings with their dealer banks so that they cannot sell dollars at high prices to another bank.
The central bank will review the proposed dollar value of banks on a regular basis.
After the meeting, Md Serajul Islam, executive director and spokesperson of Bangladesh Bank, told the media that dollars being sold on a regular basis would continue.
Exporters will have to cash dollars in their own banks, while Bafeda and ABB will set a single dollar rate, which all banks will abide by. Expatriate remittance should also be brought at this price, he added.
However, a banker, who was present at the meeting and requested anonymity, said that the uniform dollar rate would not end the ongoing crisis.
"If the demand for the dollar does not increase, the crisis will continue to grow. We have to make realistic decisions. Controlling the currency prices artificially is not a feasible idea. We have to get out of the over-controlling nature, which will be good for the country," he added.
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.
Last week, dollar prices jumped as high as Tk103 on the open market, or the kerb market, owing to high demands but inadequate supply.
Forex dealers said they were unable to get hold of dollars, as a result the rates were very high, up from Tk85.4 last month.
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, sources said.
Dr Zahid Hussain, former lead economist at the World Bank Dhaka office, told Dhaka Tribune: "If you do not have any supply, how are you going to distribute? That is why dollar prices are still high."
"I have my doubts about the extent to which this decision can be resolved. But it will be understood after it is effective," he also said.
Moreover, the whole matter is supervised by the authorities. The market is not being left to run on its own. They make the final decision. However, this time two more organizations have been added to determine the price, so that they do not have the sole responsibility in the whole matter. So I would be really surprised if this decision solves the dollar problem," said the veteran economist.
Dollar prices down by a bit
Meanwhile, the price of dollars decreased by Tk1, as the US currency was traded for Tk97.50 in the kerb market on Thursday.
The price of the dollar was Tk98.50 on Wednesday.
However, the greenback exchange rate for interbank transactions remained static at Tk87.90
As demand for the dollar rose due to increased imports, the Bangladesh Bank started selling greenbacks, releasing $5.11 billion to banks till 12 May. In FY21, the central bank purchased around $8 billion from banks.
Meraj Mavis also contributed to this report
