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Banks buy remitted USD at Tk123 from exchange houses

Edible oil importers opened LC at rate of Tk127.95
ASM Saad
30 Nov 2023 21:37:36 | Update: 30 Nov 2023 21:55:58
Banks buy remitted USD at Tk123 from exchange houses
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The exchange rate for USD remittance increased further on Thursday with several banks acquiring remittance at Tk 123 from foreign currency exchange houses.

Various heads of treasuries confirmed it to The Business Post on Thursday night.

The remittance rate surged even after Association of Bankers, Bangladesh (ABB), and Bangladesh Foreign Exchange Dealers Association (BAFEDA) fixed the rate at Tk 109.75 on Wednesday. Until Thursday, the banks bought USD at around Tk 121-122 from exchange houses.

On condition of anonymity, edible oil importers told The Business Post, "We have opened a letter of credit (LC) at the rate of Tk 127.95. We had to provide this amount because banks are facing a shortage of USD."

Just a day after taking the decision on the rate fixation, the remittance rate rose again.

When ABB-BAFEDA officially set the remittance rate at Tk 109.75 on Wednesday, sources speaking on condition of anonymity, disclosed that banks purchased remittances from forex exchange houses at Tk 123 on Thursday. It seems that banks are not following the fixed rate set by ABB-BAFEDA.

Simultaneously, importers are facing difficulties in opening letters of credit (LCs) with banks.

Another source, preferring anonymity, stated that banks are unwilling to open LCs at Tk 110.50, and importers are compelled to open LCs at Tk 124.50-125. Despite the fixed rate by ABB-BAFEDA, many banks are not following this rate.

The source claimed, "The official LC rate on paper is Tk 110 but banks receive Tk 13-14 per USD from importers."

A senior official of the central bank, speaking anonymity, revealed that the central bank is actively working to reduce the LC openings of banks. The regulator is taking measures to enforce a reduction in LC openings aiming to maintain a positive current account.

"If the demand for LC decreases, selling of USD from forex reserves will also drop," he said.