The US dollar almost disappeared in the unofficial kerb market where the price of $1 reached Tk 125 on Thursday, a day after Bangladesh Bank (BB) introduced the crawling peg system and raised the exchange rate by Tk 7 to Tk 117 in a single step.
On Thursday, the USD rate for opening letter of credit (LC) also surged to Tk 117.50-118, which is Tk 3 higher than the previous rate. LC rate was Tk 114-115 till Wednesday.
Talking to The Business Post, several kerb market traders confirmed the rise in rates. As a result, the greenback was hard to find in the kerb market amid reports of hoarding of the currency by traders for profits in the future.
Desperate buyers were forced to pay up to Tk 125 for one dollar in the kerb market, a main source of cash dollar and other major currencies, to meet their travel and treatment expenses abroad.
One of the traders, requesting anonymity, said that the official rate in the kerb market was still Tk 118. “But we are not selling USD at that rate to customers. If they agree to pay Tk 125, then we will sell. Kerb market traders are hoarding USD as well.”
Shariful Hasan, who came to the Motijheel kerb market and purchased $1 at Tk 125, said kerb market traders have claimed that the rate was high due to the USD shortage.
On condition of anonymity, the head of treasury of a bank told The Business Post, “BB has directed the managing directors of banks that the upper rate for LCs is Tk 118 and lower is Tk 117. However, we opened LCs at Tk 118 per dollar on Thursday. We are offering Tk 116 to remitters as well.”
The rate of the US dollar was around Tk 117 in the informal market until Wednesday but it shot up suddenly after BB announced the exchange rate hike, said a money changer, asking not to be named.
He said this happened not only in the case of USD. The exchange rate of other currencies also rose by Tk 4-5 overnight as the demand is higher for Saudi Riyal as the Hajj season has started.
BB Executive Director and spokesperson Mezbaul Haque told reporters that there were enough dollars in the banks and people could go to banks to buy dollars.
Our retail dollar has sufficient reserves and supply is good. Now who will sell it or not is up to them. Those who did not get dollars at the money exchange can buy dollars from banks. The central bank now has $50 million in reserve to meet retail and LC demand, he added.
