USD keeps flying high in kerb market

Volatility in the country’s foreign exchange market has further intensified, and dollar price reached a record high at Tk 118-119 in the kerb market, according to several money changers.

On Monday, the price of the US dollar in the open market was Tk 115.

According to the traders of the kerb market, there is a shortage of dollars in most exchange houses as there are more people who are buying dollars than those who are selling.

Law enforcement agencies and the Bangladesh Bank have increased surveillance in the kerb market due to the abnormal price hike.

Bangladesh Bank on August 3 suspended the licenses of five money changers and sent show-cause notices to 42 others for irregularities including keeping dollars beyond limit as per regulation.

Although the increase in dollar price in the kerb market does not have much effect on the economy, it encourages remitters to send money to the country using illegal channels.

Because remitters get more money per dollar from the kerb market than the banking channel, experts suggested that there should not be much gap between the inter-bank exchange rate and the open market dollar price.

Bangladesh received more than $2 billion in remittances in July, marking a 12 per cent year-on-year growth. The remittance inflow is 14.13 per cent higher than the month of June. However, in the financial year, remittance income dropped 15 per cent to $21.03 billion compared to previous financial year.

Meanwhile, the interbank dollar exchange rate reached Tk 95 on Monday. On July 25, the rate was fixed at Tk 94.70, which was Tk 85.80 on January 2.

On Wednesday, the central bank sold $114 million to the banks. In the last financial year, it pumped over $7.62 billion into the money market to curb the wild swing of the exchange rate.