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$ exceeds Tk100 in kerb market as demand surges

Staff Correspondent
18 May 2022 00:00:00 | Update: 18 May 2022 10:31:36
$ exceeds Tk100 in kerb market as demand surges

The dollar exchange rate in the kerb market crossed Tk 100 for the first time on Tuesday, intensifying the current volatility in the foreign exchange market.

Money changers in the capital sold each dollar for Tk 102, up from Tk 98 a day ago.

Jobbar Hussain, an official of Uttara Exchange House, told The Business Post they sold each dollar at Tk 101.8, which was Tk 97-98 the previous day.

He said there was a dollar shortage in the open market and money changers had to pay higher to buy the American currency.

“A lot of people are buying dollar as many migrants who could not fly out of the country amid the coronavirus pandemic are doing so now,” he pointed out.

Pioneer Money Changer in Motijheel sold each dollar at Tk 102, said one of its officials.

Travellers generally buy dollar from the kerb market. Nearly eight lakh migrants went abroad in the first 10 months of the current fiscal year, which was another reason why dollar price was rising in the kerb market, said industry insiders.

The Bureau of Manpower, Employment and Training said 7.99 lakh migrants had left Bangladesh between July and April of FY22. 

The central bank devalued taka by 80 paisa against dollar on Monday, the highest depreciation of the local currency in a single day. The interbank exchange rate then stood at Tk 87.5 per dollar, up from Tk 86.7 a day before.

As a result, the difference between the interbank and open market rates reached over Tk 14, the highest in Bangladesh’s history.

Meanwhile, importers are spending as much as Tk 94-96 per dollar to pay import bills. In the last 20 days, the value of taka fell by Tk 1.3 against dollar in three phases. The Bangladesh Bank depreciated taka five times this year.

“The central bank has devalued taka again to stabilise the market because the demand for greenback has increased,” said Bangladesh Bank Executive Director and Spokesperson Serajul Islam.

The demand for dollar recently grew primarily due to rising import payments. Such payments stood at $61 billion between July and March of this fiscal year while export earnings were $36 billion, resulting in a trade deficit of $25 billion, the central bank data shows.

To meet the growing demand, the central bank has continuously been injecting dollar into the market since August last year. It injected over $5 billion into the banking sector till Monday.

The country’s foreign exchange reserves are declining day by day due to growing import payments and a downward trend in remittance earnings. Remittance was down by 16.25 per cent to $17.3 billion in 10 months of this fiscal year, the central bank data shows.

Forex reserves fell to $41.92 billion on May 11 after paying the Asian Clearing Union $2.24 billion, as per the central bank data. There was $46 billion in reserves on February 28 this year.

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