The volatile kerb market for foreign currencies has seen a new record with the US dollar peaking to Tk 111, a nearly Tk 6 jump from a day earlier, the biggest single-day jump in the history of Bangladesh.
The banks were selling the dollar at Tk 102.5 on Tuesday, which was Tk 0.5 higher than on Monday.
As exports and falling remittances have not been enough to fill in the gap created by the imports amid global price rises triggered by the Russia-Ukraine war, the taka has been losing its value against the dollar.
Some exchangers even said that they had to turn away customers because of the shortfall.
Usually, as soon as Hajj ends, the taka-dollar exchange rate eases up as pilgrims returning from Saudi Arabia offload the greenbacks in their possession, mostly in the kerb market to get a better price.
Not this time though.
Amin Uddin Bhuiyan, director of Eastern Money Exchange, said the price of the dollar has been changing by the hour since Tuesday morning.
According to him, the dollar price rose to Tk 108.5 by 11 am, and by 2:30 pm, it stood at Tk 111, a new record.
The price slightly fell after that, and eventually the market closed at Tk 110 in the evening.
“It has been a bizarre day. The crisis of dollars is paramount,” Amin said.
When interviewed, anxious people working in the kerb market said they were unsure when the volatile market would see some stability.
Md Rubel Sarkar, a salesperson at Meximco Money Exchange in the Paltan area, said they cannot even confirm dollar prices to callers asking them about the price over the phone.
“Instead, we have been asking them to come to the market in person to find out what the rate is since prices keep changing,” he said.
BANKERS AND EXPORTERS ALARMED
The dollar crisis was at the top of the agenda in a meeting of bankers on Monday.
In mid-May, the price of the US dollar rose to Tk 102 in the kerb market. In the following two months, the dollar supply in the market increased, mostly by the Bangladesh Bank, and the rate was somewhat stable, fluctuating between Tk 97-98.
Due to the crisis, the central bank increased the exchange rate to a record Tk 94.70 in interbank transactions on Monday.
Importers have been alleging that they were unable to buy dollars at the rate set by the central bank. Instead, they are paying Tk 102 to buy dollars from the banks.
Bangladesh adopted a floating exchange rate system in 2003 to effectively integrate with the global market.
However, the central bank imposed tight controls on the dollar exchange rate due to the massive depletion of the greenback it has in its coffers.
Finally, it reintroduced the floating exchange rate system in early June as part of efforts to stop the rapid devaluation of the taka and save its foreign currency reserves, but the taka’s fall has continued with no sign of stopping due to the volatility in the international market.