A dollar will cost below Taka 90 in all banks to overcome crisis

 

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To overcome the dollar crisis, it has been decided to fix a rate for the collection of expatriate income. Besides, the price at which the export bill will be cashed in the bank and sold to the importers will also be decided. Banks will determine this price by considering the market on a daily basis. This one price will comply with all banks. Bangladesh Bank will review it. However, in any case, the price per dollar will not exceed 90 Taka, the Bangladesh central bank said.

The central bank held a meeting on 26 May 2022 with the Association of Bankers Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers Association (BAFEDA), an association of the bank's chief executives, to resolve the dollar crisis. The banks took this decision on the advice of the Bangladesh central bank. The meeting was chaired by Governor Fazle Kabir.

At the end of the meeting, the banks decide the price of each dollar. According to the proposal of the banks, the price of the dollar will be 88 Taka 95 Paisa for the export bill monetization, the expatriate income will be brought at 89 Taka 80 Paisa, and the dollar will be traded in the interbank market at the rate of 89 Taka 85 Paisa and it will be sold to the importers as 89 Taka 95 Paisa.

Several bankers who attended the meeting said the meeting was called to resolve the crisis. The crisis will be exacerbated by the decision of the meeting. Because expatriate income at such a low price will not come to the country in a legal way. Export earnings will also be hampered by the low value of the dollar. Without acknowledging the reality, the Bangladesh central bank still wants to keep the dollar price below 90 Taka. Although in reality, it is more than 95 Taka.

After the meeting, Sirajul Islam, executive director and spokesperson of Bangladesh Central Bank, told reporters that the dollars being sold from the reserves on a regular basis to alleviate the crisis and it will continue. Exporters will have to cash dollars in their own banks. BAFEDA  and ABB will set a dollar price, which will abide by all the banks. Expatriate income should be brought at this price. Bangladesh Bank will regularly review the value of the dollar.

In the meeting held at Bangladesh Bank, the bankers were informed that though the meeting fixed the price as 87 Taka 90 Paisa, in reality, there is no dollar transaction at this price. The dollar has gone above Taka 95 per dollar. For this, it is necessary to determine the realistic price of the dollar. At this time, Bangladesh Bank said that the banks will determine the price after considering the market. Everyone will abide by it.

The meeting was attended by Selim RF Hossain, Chairman of ABB and Managing Director (MD) of BRAC Bank, and Ataur Rahman Pradhan, Chairman of BAFEDAR  and MD of Sonali Bank. At the meeting, the bank's MD was advised not to give any statement to the news media.

The cost of imports has already risen by about 44 percent due to the increase in the price of imported goods and shipping. That cost is not going to be met with export and expatriate income. This is creating a dollar crisis. The central bank is selling dollars from the reserves to cope with the crisis.

According to Bangladesh Bank, the price per dollar was 87 Taka 90 Paisa yesterday. However, banks are bringing in expatriate income at Taka 95 and monetizing export bills. Importers have to buy dollars at a higher price than this. As a result, the price of imported goods has already increased.

The government has stopped foreign travel of government officials to deal with the situation. Bangladesh Bank has mandated 70 percent cash deposit in the import of certain luxury goods, including cars. The National Board of Revenue (NBR) has imposed restrictive duties on the import of 135 goods.