BB devalues taka against dollar again by Tk 0.25

The Bangladesh Bank on Wednesday devalued the taka against the US dollar further to tackle the pressure in the foreign exchange market created by rising import payments.

The interbank exchange rate hit Tk 86.45 per dollar for the first time, up from Tk 86.2 on Tuesday, as per the Bangladesh Bank’s latest data.

Despite the continuous devaluation, the central bank sold $4.5 billion to banks in nearly nine months of this fiscal year due to the rising demand for the greenback. Also, it sold $521 million to banks in 24 days of this month.

The local currency is trading at more than Tk 90 per dollar in the kerb market.

Industry insiders said the growing demand for the greenback was mainly the result of higher import payments following an upward trend in commodities and fuel prices in the global market.

They said the local currency’s depreciating trend against the greenback had pushed up prices of imported goods in the local market. Importers accused some banks of creating an artificial dollar crisis and imposing a higher rate for opening letters of credit (LCs) for imports.

They said the Bangladesh Bank should look into the matter as commercial banks should not impose higher dollar rates for LC opening.

A high official of a Chattogram-based industrial group told The Business Post banks were imposing Tk 89 per dollar for opening LCs despite the interbank exchange rate being Tk 86.45 per dollar. “That is why we have been suffering a lot while paying import bills.”

Mohammad Mustafa Haider, group director of TK Group of Industries, recently told The Business Post consumer goods prices would increase further in the local market as import costs had risen drastically due to the dollar rate hike.

He said most banks were imposing a higher rate for opening LCs by taking the advantage of the ongoing dollar crisis.

A high official of the central bank’s Forex Reserve and Treasury Management Department told The Business Post the increasing trend in import payments was the main reason behind the dollar shortage in banks.

He said the state-run commercial banks had bought a large amount of dollars from the central bank.

Import payments rose sharply by 52.01 per cent to $52.6 billion from July to February of the current fiscal year.

As per the central bank’s latest data, petroleum import payments rose by 89.24 per cent to $4.03 billion during these eight months, intermediate goods by 58.11 per cent to $4.02 billion, and capital machinery by 61.04 per cent to $3.04 billion.

The Bangladesh Bank official said import payments would increase further in the coming days as industries were expanding after the Covid-19 shocks.