Clampdown on rogue money changers

The global economy is going through a volatile period and as several recessions and economic upheavals of the past have shown, periods of uncertainty open up ways for unlawful activities. The Ukraine war, which now shows all signs of a long drawn-out affair, is beginning to manifest itself in a series of travails across the social spectrum.

While the supply chain is being disrupted, inflation is skyrocketing with the impact felt in global trade. In Bangladesh, the exchange rate between the Taka and Dollar has seen an abnormal surge with the price of the Dollar going up to Tk. 112 in the kerb market.

As per a TBP report, on July 27, ten inspection teams of the central bank started investigating money changers in Dhaka City. The main motives are to prevent hoarding, and, most importantly, to check the whitening of illegally stashed wealth through clandestine conversion.

According to the report, 235 licensed money changers and around 1000 authorized dealers’ branches of banks are permitted for selling and buying foreign currency to travellers.

However, around 600 money changers are buying and selling foreign currency illegally.

Bangladesh Bank on Tuesday suspended the licenses of five money changers and sent show-cause notices to 42 others for irregularities including keeping dollars beyond the limit. As per law, any money changer is permitted to hold a maximum of $25,000 at the close of each business day. BB officials said the cash beyond this limit would have to be deposited in their respective bank’s foreign currency account. However, the amount cannot exceed $ 50,000 at any point.

A high official of BB told the Business Post that the BB inspection team found that the money changers were maintaining several books for the transaction of foreign currency.

The dollar price has risen steadily since the conflict began in Europe and the economic implosion of Sri Lanka has triggered a panic buying of the currency. Since Sri Lanka is a South Asian neighbour, fears of a similar economic debacle also hit Bangladesh.

While many economists have warned of tough times ahead for Bangladesh, they categorically, and in some cases, definitively ruled out the possibility of a total economic meltdown.

But in times of crisis, the human mind cannot be appeased easily. This tendency is being utilized to the full by rogue foreign currency traders who are exploiting the current economic turmoil to make a swift buck.

Hoarding of dollars is done usually to sell it at a higher rate later on but the consequence of this can trigger a dollar shortage in the market. This in turn will only add to a market panic with a damaging impact on social morale.

While the government is keen to rein in the currency traders, individual agents often remain outside the reach of the law. Reportedly, many licensed money changers employ agents who work separately while the changers keep a clean sheet.

The moves by the central bank are certainly commendable although the world of currency trade is so murky that preventing unscrupulous activities totally is almost impossible.

However, the authorities concerned have to carry on with their activities while a sense of moral value is needed from the general people. In addition to money changers, independent currency dealers must practice some ethics.

The abnormal rise of the dollar price will also work to create a plethora of shady monetary transactions aimed at converting dirty money acquired from racketeering.

The central bank and the law enforcers must be alert to forestall such moves. From a practical angle, preventing all sorts of aberrant acts relating to the dollar is impossible; however, with a vigorous campaign, the wide range of nefarious dealings can be thwarted significantly.