Pallabi’s Md Asadul Islam arrived at money exchanges in Paltan on Wednesday, looking to buy $500 for a business trip to Singapore, after he failed in Mirpur.
“No one in Mirpur was able to give it to me. So I came to Paltan but these people can sell only $200 now and the rest in the afternoon. Even if I agree to it, the prices in the afternoon will be different from what it is now,” he said.
The money changers asked for Tk 119 per dollar from Asadul – an increase of Tk 5 from the last business day.
Md Nazmul Hossain, a businessman from Shantinagar, also needed $500 for his daughter-in-law but could manage only $200 from the Shahbagh branch of Sonali Bank on Monday.
“The manager gave me $200 at my request, not more.”
He was able to purchase dollars at Tk 104 from the bank, but it was priced at Tk 114 on the open market. They could not offer him more than $200 either.
The Bangladesh Bank is monitoring the open market along with the banks in an effort to stay on top of the spiking dollar exchange rate. It has punished errant bankers and merchants, but the crackdown seems to have backfired, at least for now.
The clampdown has stoked fears among unlicenced traders. They are not trading the dollars they have now, leading to an unofficial limit on the size of transactions being made by the authorised companies and banks. The situation has worsened the supply crunch.
In fact, the exchange companies are running on low supply and are only doing business with regular customers.
Despite the ongoing efforts, the dollar’s price has risen in the span of a few days. In May, it was sold at Tk 102 before falling to Tk 98-99 and settling for some time.
But show-cause notices to 42 money exchange companies and cases against 11 others stirred up the open market where the dollar price leaped to Tk 119 on Wednesday. The Bangladesh Bank also ordered the removal of chiefs of treasury department of five local and one multinational bank on Monday for “making extra profit in treasury operations”.
Finance Minister AHM Mustafa Kamal on Wednesday said such steps will continue if people try to manipulate the market.
Md Imranul Haque, a resident of Mohammadpur’s Town Hall area, said he will have to travel to India’s Chennai for a scheduled medical check-up at the end of this month. With the dollar rate surging, he wanted to buy $200 now.
“I’ll buy tickets with taka, so I won’t need dollars as much but they’re asking for Tk 119 [per US dollar]. The price is the same on the street [traders with no licence] and in the market. I’m not going to buy now. Let’s see if the price falls. If it doesn’t, I’ll have to buy at higher prices. There’s no other way.”
An employee at New Janata Money Exchange, Ariful Rahman said: “Only one person came to sell dollars to us today. We bought $100 at Tk 115. We sold each at Tk 116. But no sellers have arrived since then. The prices shot up in the afternoon. How are we supposed to sell after buying dollars at such high prices?”
Meximco Money Exchange suspended dollar exchange, said Managing Director Md Mosharraf Hossain. “I’ve asked all my regular customers to wait until the price settles down at a point.”
Md Helal Uddin, the general secretary of the money exchange association, said: “Many have suspended business in fear of the drive. Illegal exchangers have hoarded most of the dollars. They’ve fled the market due to the drive.”
He pointed out that the lack of supply and the banks not selling much have exacerbated the price point issue. “It will take some time for dollars to arrive in the market.”
The Bangladesh Bank sold $114 million on Wednesday to get a grip on the crisis.
Central bank spokesperson Md Serajul Islam on Monday said they sold the dollar at Tk 95 to the banks. The rate was Tk 3 higher than the previous day.
The national bank supplied banks with the currency at the same rate on Wednesday as well, though many banks traded dollars at Tk 109.5, including The City Bank.
One Bank sold the US dollar at Tk 108, NRB Bank and Dutch-Bangla Bank at Tk 107 on Monday, according to their websites.
The banks said they bought US dollars at Tk 109-110 from foreign exchange houses, so they were selling at a higher price.