Bangladesh Bank steps in as dollar surges to Tk 100 again

Bangladesh Bank has moved to ease the supply of foreign currency as the taka has lost more of its value, sending the dollar to Tk 100 again in the open market.

Published : 17 July 2022, 03:03 PM
Updated : 17 July 2022, 03:03 PM

This is the steepest rise of the dollar against the taka since mid-May, when the foreign currency reached Tk 102 in the open market. Banks sold the dollar at Tk 98 on Sunday.

It fell after hitting Tk 102 and hovered around Tk 97-98. Money changers, however, said there was no supply crunch.

Meanwhile, Bangladesh Bank temporarily removed the cap on interest rates on Non-Resident Foreign Currency Deposit Accounts, paving the way for banks to offer lucrative rates to expatriate Bangladeshis and foreigners.

In line with the Guidelines for Foreign Exchange Transactions-2018, banks are allowed to open interest-bearing NFCD accounts in the name of non-resident Bangladeshi nationals and persons of Bangladesh origin, including those having dual nationality and ordinarily residing abroad.

The Eurocurrency deposit rate, which usually remains between 1 percent and 1.5 percent, was applicable to these accounts.

Banks can now raise fresh deposits under NFCD accounts without following the regulation on the interest rate, the central bank said in a notice.

This relaxation will also be applicable to NFCD accounts of foreign nationals and companies registered or incorporated abroad, banks, financial institutions, institutional investors and fully foreign-owned industrial units in the Export Processing Zones, Economic Zones and High-Tech Parks.     

Bangladesh Bank made several policy changes last week, such as halving the retention limit of realised export proceeds, in a bid to ease the pressure on the country's foreign exchange reserves amid a global economic crisis.

The new measures have come as the country's forex reserves dropped below $40 billion for the first time in two years after the authorities paid import bills of the Asian Clearing Union.

Rising prices and shipping costs amid the recovery from the effects of the coronavirus pandemic and the Russia-Ukraine war have also put pressure on Bangladesh’s reserves, with the dollar prices soaring against the taka.

The authorities have taken a slew of measures, including restrictions on the imports of luxury products, to save dollar reserves. The government has also suspended spending on low-priority projects and foreign tours of officials.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher