Banks sell $16m at Tk106 interbank rate

Banks transacted $16 million among themselves at Tk106 per dollar on Tuesday, the second day since the interbank forex market resumed after five months with banks agreeing on uniform rates for exporters and remitters. 

The interbank rate was Tk103.50 a day ago.

On Tuesday, banks encashed remittance and export proceeds at the rate set by the Bangladesh Foreign Exchange Dealers Association (Bafeda).

Of the sales, the highest of $2 million was sold by City Bank, Bangladesh Development Bank and Eastern Bank.

Mashrur Arefin, vice chairman of the Association of Bankers, Bangladesh (ABB) and also MD of City Bank, told The Business Standard, "I am happy that we sold $2 million in the interbank market today. Two smaller banks needed dollars badly. We sold them at Tk105 rate. My buying cost was higher than that, but I don't actually look at profit and loss.

"I basically take a view of the market – whether the dollar will go below Tk105. The underlying assumption is that an active interbank market will essentially diminish the cost of remittance dollars."

Last Sunday, Bafeda and the ABB decided that the dollar price will be determined by calculating the average price of foreign exchange and export earnings in five working days. All banks will encash export proceeds and collect remittances at the same rate.

Last Sunday, the maximum remittance collection rate was Tk108. Bafeda set a maximum of Tk99 per dollar to encash export income.

However, banks will settle import Letter of Credit (LC), using a weighted average buying cost at a maximum rate of one taka higher.

The leaders of the organisation said the rate will change after a few days.

Treasury officials, however, said not all banks are profiting Tk1 per dollar, with some adding a maximum of Tk0.30-0.50.

According to that, yesterday the banks were settling LCs at a maximum of Tk108.50 and minimum of Tk105. 

They said banks had agreements with some exchange houses which meant remittance dollars were received from those at a slightly lower rate.

No bank, however, has charged a rate higher than Tk108.

In case of export proceeds, exporters have received the rate of Tk99 fixed by Bafeda against the dollar.

Besides, exchange houses have been given a maximum of Tk108 per dollar for remittances.

Selim RF Hussain, ABB chairman and managing director of Brac Bank, said due to the decision taken by ABB and Bafeda, some comfort was returning to the market.

He, however, said it would still take time.

"We have introduced these rates in close coordination with the Bangladesh Bank. Our main objective is to bring stability to the market. It will probably happen in a few days."

Although banks followed the interbank rate, the Bangladesh Bank's rate remained the same. On Tuesday, the central bank sold dollars at Tk96, after it increased the price by Tk1 on Monday.

Central bank spokesperson Serajul Islam said $45 million dollars were sold yesterday at a rate of Tk96 for government imports and imports of daily essentials.

He said now the banks' dollar rate will be uploaded on the central bank's website, but the central bank's rate would not be available there for now.