The Bangladesh Bank on Monday instructed money changers to sell US dollars at maximum Tk117 each after many exchanges were found selling dollars at high prices recently.
Central Bank Governor Abdur Rauf Talukder at a meeting with the Bangladesh Money Changers Association gave the instruction.
Money exchanges were instructed to buy dollars at a maximum rate of Tk115.5 each and sell them at Tk117 each, ensuring a profit margin of no more than Tk1.5 a dollar.
The move came after a notable surge in the dollar exchange rate on November 8, reaching Tk124 in banks and escalating to Tk128 a dollar on the kerb market on November 9.
The rate increased significantly on the day after the media reported that several banks collected dollars for as high as Tk124 each.
The interbank dollar rate set by the Association of Bankers Bangladesh and the Bangladesh Foreign Exchange Dealer Association was Tk111 on November 8.
To address this unprecedented increase, the Bangladesh Bank convened meetings with ABB and Bafeda, determining that banks should adhere to rates established by the associations for dollar transactions.
However, money changers claimed that they did not obtain dollars at the prescribed rate.
Bangladesh Bank officials also held meetings with a number of foreign exchanges and asked them to trade dollars at the rate set by ABB and Bafeda.
Dollar demand in the country’s banking system has been on the rise since the very beginning of FY23.
The dollar crisis in banks also spilled over into the informal market that widened the crunch.
There are many exchanges which do not have dollars to sell as many have kept reserved dollars expecting more appreciation in the rate while many others are buying a large volume of dollars for business, bankers said.
Due to the dollar crisis, banks are struggling to settle import payments and open letters of credit, posing substantial challenges for businesses.
In response, the government and the central bank have implemented measures to restrict imports, particularly luxury and non-essential items.
The central bank has continued providing the country’s scheduled banks with foreign currency support for managing the current exchange rate volatility.
Over the past 28 months, the central bank sold approximately $26 billion from its foreign exchange reserve.
