BAFEDA to set uniform rate for foreign exchange houses

Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) will set a uniform exchange rate for overseas exchange houses and inform about it to the central bank by next Sunday.

The decision was made at a meeting of Bangladesh Bank, Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB) on Thursday at BB headquarters.

Bangladesh Bank Deputy Governor Ahmed Jamal presided over the meeting while ABB Chairman and BRAC Bank Managing Director Selim RF Hussain and BAFEDA Chairman and Sonali Bank MD and Chief Executive Officer Md Afzal Karim led their respective organizations.

Bangladesh Bank Executive Director and spokesperson Md Serajul Islam said the BAFEDA and ABB would set a uniform exchange rate for overseas exchange houses and encashment of export bills.

He said: “The ABB and BAFEDA will hold a meeting to set the uniform exchange rate and inform us next Sunday.”

After the meeting, ABB Chairman Selim RF Hussain told Journalists that ABB and BAFEDA would hold a meeting next Saturday or Sunday for setting a uniform exchange rate and then it would inform the central bank.

He also said the forex market would stabilize soon as the negative current account balance had come down.

BAFEDA Chairman and Sonali Bank MD Md Afzal Karim said: “We are taking several measures to stabilize the forex market and we will see a positive outcome in the next week.”

A Member of BAFEDA told the Business Post that different banks are now quoting different rates while collecting US dollars from the foreign exchange houses and this is playing a role in creating instability in the forex market.

“We expect BB to issue a circular implementing the uniform exchange rate. The banks will then have to comply with the rate,” he added.

The foreign exchange market is still unstable as importers are now spending Tk106-107 per dollar to pay their import bills, while the inter-bank exchange rate is Tk95 per dollar.

State-run banks and small banks are not getting US dollars from the foreign exchange house because some large banks offer higher rates to the foreign exchange house for collecting remittance, which forced them to take initiative for setting a uniform exchange rate, as per industry insiders.

The volatility in the forex market helped reduce the forex reserve of Bangladesh. As of September 07, forex reserves stood at $38.94 billion, down from $48.11 billion a year ago.