Card transactions 166% up in Jan-Aug 

Transactions through both debit and credit cards were 166% up in the first eight month of this year compared to the same period last year, according to the central bank, as many outbound travellers opted for carrying dollars in cards instead of cash amid a dollar crisis. 

The January-August card transactions stood at Tk2,716 crore, which was Tk1,020 crore in the corresponding period of 2021, according to the central bank report. 

The report says August card transactions were Tk36,555 crore – down from July's Tk38,460 crore. 

In August, Tk36,555 crore and foreign currency worth Tk520 crore were transacted through cards. Though local currency transactions through cards dropped in that month, dollar transactions rose.

Mahbubur Rahman, managing director of Mutual Trust Bank, said transactions through cards increased as it is more convenient than cheques. Besides, those who are travelling abroad recently are carrying dollars in cards – boosting card transactions further.  

He said the US dollar is now Tk115 in the kerb market while taking the greenback in cards costs only Tk105, prompting the travellers to opt for the digital means for transactions.     

Foreign currency transactions through credit cards have been allowed in the country for a long time. In June 2020, the central bank allowed banks to issue international debit cards to customers against their accounts.

The dual currency cards allow hotel booking abroad and purchases of a certain amount from home. According to the Bangladesh Bank, a maximum of $12,000 can be spent through the cards a year. Banks sell dollars to customers both in cash and on cards. 

It used to cost less to get dollars on cards than cash. But the authorities recently decided that the dollar exchange rates for card and cash will be the same. Bankers say the decision might see a decline in dollar transactions through cards. 

Foreign currency transactions through cards have been on a gradual rise since the beginning of 2022, according to the Bangladesh Bank report. 

There were around 3.33 crore debit and credit cards till August this year. Of those, there were around 2.83 crore debit cards and only 20.22 lakh credit cards. Debit cards account for the major chunk of the transactions.   

GM Abul Kalam Azad, executive director and spokesperson of the Bangladesh Bank, said forex transactions through cards are due to inconsistent supply and demand of the greenback. 

The country's forex market has been volatile for more than five months. The central bank is struggling to stabilise the dollar rates by selling the greenback to banks. This has been contributing to the depleting forex reserve and leading the taka to be weaker.