Banks and foreign currency dealers have raised the value of Bangladesh Taka against the US Dollar for the first time since taking over the duty amid rapid devaluation of the local currency.
In an emergency meeting with the Bangladesh Bank on Wednesday, the Bangladesh Foreign Exchange Dealers Association and the Association of Bankers, Bangladesh lowered dollar prices by Tk 0.5 to Tk 110.
It is the first cut in dollar price since August 2021. The Bangladesh Bank was setting the price at that time.
BAFEDA and ABB have been setting dollar prices since September last year in a bid to stabilise the exchange rate.
Since taking the responsibility, the two associations had also been hiking dollar prices regularly.
The new rate will be effective from Thursday. Buying at the new price, the banks will have to sell dollars at a maximum of Tk 110.5.
From Oct 30, the dollar purchase price stood at 110.5 and the maximum selling price was Tk 111, except for remittances.
“The country’s current account balance and financial account were in the red last December. The current account balance is showing a surplus of $1 billion. And the trade deficit and financial account deficit are going down gradually. So the value of the taka has been raised against the dollar,” said Md Afzal Karim, president of BAFEDA and managing director of Sonali Bank.
Meanwhile, banks can still offer their own 2.5 percent incentive along with the government’s 2.5 percent for remittances. The incentives can bring down the dollar price by Tk 0.5 to Tk 115.5.
In an effort to curb the illegal channels of remittances, which are also used to launder dirty money, the Bangladesh Bank in August 2022 stipulated that the difference between cash dollar price in banks and the open market will be a maximum of Tk 1.5.
The central bank also carried out drives to penalise money exchange services not abiding by the rules.
The price of the dollar in the open market has to be lowered by Tk 0.5 according to the latest decision.