Remittance slowdown lifts bank dollar rates as open market eases

The dollar is rising again in banks, gaining Tk 1 in a week, while its price has edged down in the open market.

On Thursday, the final trading day of the week, the interbank market’s highest dollar rate was Tk 123, the lowest Tk 122.99 and the average Tk 123.

A week earlier, on Aug 19, the highest rate was Tk 122.15, the lowest Tk 121.97 and the average Tk 122. The rate therefore rose Tk 1, or 0.82 percent, in a week.

Bangladesh Bank Executive Director Arief Hossain Khan said the movement was linked to remittance flows.

“Remittance inflows surged in the first half of this month, increasing supply and pushing the rate down. Towards the end of the month, remittances are showing some slowdown; as a result, supply has declined somewhat. The price is also rising.”

Meanwhile, dollars sold outside money exchanges in Motijheel’s open market on Thursday fetched Tk 127.5-127.6, while buyers paid Tk 127.2-127.3. A week earlier, the rate had reached Tk 128.5.

The interbank rate had earlier peaked at Tk 123.82 on Aug 6, with the lowest at Tk 123.80 and the average at Tk 123.81.

It then declined before climbing again this week: the average was Tk 122.32 on Sunday, Tk 122.52 on Monday and Tk 122.76 on Tuesday. Wednesday was a public holiday for Eid-e-Miladunnabi, halting interbank trading.

The Money Changer Association of Bangladesh (MCAB) said exchange houses were following its fixed rates.

Since Aug 24, MCAB has set the dollar selling rate at Tk 126.5 and buying rate at Tk 125.5.

MCAB President MS Zaman said all exchange houses were adhering to the rates.

“Since Aug 24, all exchange houses have been buying and selling dollars at fixed rates. We are strictly monitoring this on behalf of the association. No one is buying or selling dollars outside the fixed rates.”