Maintain Tk1 spread for $ trade, BB tells banks

The Bangladesh Bank has asked banks to strictly enforce the Tk 1 spread for buying and selling USD, in a bid to cool down the foreign exchange market.

Central bank officials say the regulator gave the directive on Sunday in a meeting with representatives of banks dealing in foreign exchange. The Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) had set the Tk 1 spread earlier in 2006.

Speaking with the media, Bangladesh Bank Executive Director and spokesperson Md Serajul Islam said the banks have agreed with the regulator’s decision. Bankers have also been instructed to bring back and encash export proceeds as quickly as possible, he added.

Senior officials of the central bank and leaders of the Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) attended the Sunday’s meeting.

The central bank has already taken several initiatives to cool down the foreign exchange market, but those are yet to be fruitful.

Last Thursday, the USD rate hit a record high Tk 118 to Tk 120 in the kerb market. Importers spent Tk 110 to Tk 113 per USD to pay their import bills despite a series of initiatives by the central bank.