Bankers, forex dealers associations to set uniform dollar rate Sunday

The Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers' Association (Bafeda) are expected to fix a uniform exchange rate of Taka against the US dollar on Sunday after reviewing the overall situation of the country's foreign exchange market.

The two associations were given the authority at a meeting held yesterday with Bangladesh Bank Governor Abdur Rouf Talukder in the chair, according to meeting sources.

The sources also said banks in the country are currently encashing export proceeds between Tk99 and Tk102 per dollar, while they are collecting remittances at Tk108-110 per dollar. On the other hand, banks are settling import payments at a rate Tk1 higher than the weighted average of the export proceeds encashment rate and remittance collection rate.

Against such a backdrop, the central bank governor has tasked the ABB and Bafeda with fixing these three rates.

After the meeting, Selim RF Hussain, chairman of the ABB and managing director of Brac Bank, told TBS, "Today's meeting was on sharing general information about the market. The governor has tasked the ABB and Bafeda with setting the dollar exchange rate. We will announce our decision on Sunday."

He said, "We are hearing some good news about the market. In August, the country's current account balance came to a good position. It will become more favourable in a month or two. The current instability will no longer exist."

ABB Vice Chairman Mashrur Arefin told TBS that the idea of the meeting was to come to a point where the expectations of all four participants in the market are met in a fair and just manner.

These four are exporters, inward remitters, importers and bankers. Only one thing can ensure that, which is to find out where the market is, Mashrur said.

"The meeting today tried just that. The governor and his team insisted also on being fair to all," he added.

The governor talked about not having two rate curves in existence at a given time, which is the expectation of bankers too, he mentioned, adding that the ABB and Bafeda now will further work on numbers and trends and will try to come up with a market driven rate curve within a few days.

Md Afzal Karim, chairman of Bafeda and managing director of Sonali Bank, said, "We are going to take initiatives so that the price of the dollar does not increase. Necessary steps will be taken to stabilise the market and it needs another week."

Sirajul Islam, spokesperson of the Bangladesh Bank, told TBS that the central bank will accept the dollar rate fixed by the Bafeda and the ABB.

"The two organisations will determine the exchange rates of US dollar for remittances and encashment of export proceeds. Later, they will fix the BC selling rate based on these rates."

Asked when the ABB and Bafeda will fix the rate, the central bank spokesperson said they will inform the central bank of the rate by Sunday or Monday.

The fixed rate will be updated on their websites every day, he added.

Dollar gets pricier

In the span of a day, the price of the dollar in settlement of import LCs (letters of credit) increased by at least Tk2. On Thursday, banks charged a maximum of Tk111 per dollar for LC settlement, up from Tk109 a day ago.

On the other hand, exporters received Tk106 against $1 from banks while encashing export proceeds on Thursday, although banks received dollars from exporters at a rate of Tk102 on Wednesday.

Banks had to pay a maximum Tk114 per dollar to buy dollars from exchange houses.

The greenback is also being bought and sold at high prices in the open market.

On Thursday, money changers bought $1 dollar for Tk113 and sold it for Tk114. The dollar rate in the kerb market remained the same on Wednesday. However, the money changers sold the dollar at a rate of Tk112 on Tuesday.

When asked about this, the owner of a money changer in the capital's Motijheel area who did not want to be named, said, "The price of the dollar is increasing everywhere now. Banks are now settling LCs Tk111-112. In that case, the open market rate will normally be a little higher."