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Banks ignoring fixed USD rate

ASM Saad
21 May 2024 21:56:51 | Update: 21 May 2024 22:20:58
Banks ignoring fixed USD rate

Some banks are not complying with the crawling peg exchange rate system prescribed by the Bangladesh Bank (BB) and allowing themselves to offer Tk 118.30-119 to remitters against one US dollar.

Apart from offering the higher remittance rate on Tuesday, these banks also opened Letters of Credit (LCs) at Tk 120-121 — even though the minimum LC opening USD rate is Tk 117.30 and the maximum is Tk 117.50, according to sources.

Officially, the current USD exchange rate is Tk 117 for all purposes — including remittance and LC opening — in line with the crawling peg system introduced earlier this month, which raised the exchange rate by Tk 7.

However, some banks operating with the backing of influential business groups are offering more to the remitters.

Requesting anonymity, the heads of treasury of several banks on Tuesday told The Business Post that most of the banks are not complying with the fixed rate. These banks are trying to purchase USD from remitters by offering more money.

Two weeks ago, BB had directed money changers to sell per USD for no more than Tk 118.50.

The treasury head of a private bank, asking not to be named, said the central bank has also directed the managing directors of all banks that the highest USD rate for opening LCs would have to be Tk 118 and the lowest Tk 116. However, some banks have started ignoring the directive alongside the rate fixed by the crawling page system.

Usually, banks open LCs at a higher rate than the rate offered to remitters.