Dollar climbs to record Tk119 in kerb market

The US dollar continues its winning streak, hitting a record Tk119 in the kerb market on Wednesday, with most money exchanges showing more interest in buying than selling amid the growing cash dollar crisis.

On Monday, the greenback was sold at Tk115 in the open market.

Open market sellers say most money exchanges are now facing a shortage of cash dollars. That is why they are having to turn down most people who reach out to them for dollars.

Besides, the people who trade in cash dollars outside the banks of Motijheel have also refrained from direct buying and selling of dollars, fearing raids by the central bank and law enforcement agencies.

In this situation, spokesperson of the Bangladesh Bank Md Serajul Islam said they have suggested that the people going abroad for travel, medical treatment and other purposes use cards.

Replying to a question, he told The Business Standard that the Bangladesh Bank has now no plan to import cash dollars.

The central bank used to import cash dollars and supply to local banks, which has remained stopped for a long time.

"Our remittance inflows amounted to $2.1 billion in July, which was the highest in 14 months, while imports declined by around $2 billion in the same month. If the trend continues this way, our dollar crisis will go soon," he said.

Talking to TBS, Ripon Mia, who trades in dollars on the open market, said, "I have no dollars in my hand now. Rather, I am ready to give Tk116 per dollar."

Nadir, a money exchange house employee, said there is a severe crisis of dollars in the market. "Nevertheless, I can manage some [dollars] if anyone is seriously in need but at Tk119 per dollar," he also said.

Shafiul Islam, a cash dollar seller, said many people have now stopped buying and selling dollars in fear of police raids.

Helal Uddin, secretary of the Money Changers Association of Bangladesh, said they got allegations that many sold cash dollars at Tk118-Tk119 in the open market. "Our registered money exchange houses are buying a dollar at Tk108 and selling it at Tk110," he noted.

Talking to TBS, the treasury head of a private bank has put the dollar crisis to a section of people who are hoarding dollars, anticipating that its price will see a massive jump in days to come amid the ongoing volatility in the foreign exchange market.

Moreover, many Bangladeshi expatriates are now bringing in gold instead of cash dollars while returning from their destination countries, mainly from the Middle East, adding to this dollar shortage, he noted.

They are selling those gold ornaments at Tk5,000-Tk7,000 higher than local market prices per bhori, he added.

Banks are not getting cash dollars either as they offer Tk104-Tk105 per dollar, while the open market rate is up to Tk117, he said.

On 17 May, the dollar crossed the Tk100 mark for the first time in the country's open market. Then, it dropped to below Tk100. Later on, 17 July, it surpassed Tk100 again. At the end of last month, the price of the greenback rose to Tk112.

In the interbank currency market, the dollar was traded at Tk95 on Wednesday. The Bangladesh Bank sold $114 million to banks at this rate only to meet government import bills on the day.

On Sunday, the interbank rate was Tk94.70.  At the beginning of May, the rate was Tk86.45.

In FY22, the central bank sold $7.7 billion to banks. The country's reserve dropped to $39.5 billion on Wednesday because of continuous dollar sales to meet import bills. Since July this fiscal year, dollar sales from the reserve have stood at $1.49 billion.

In the meantime, both LC settlement and remittance encashment rates dropped a bit on Wednesday following the central bank's order to remove treasury heads of six banks amid the allegation of dollar price manipulation.

Banks settled LCs at Tk110 per dollar, down by Tk2 in the span of a day.

A high official at the central bank told TBS that the six banks apart, they have also found evidence that a few more banks made extra profits from foreign exchange dealings.

They have verbally warned them as their price manipulation was not that severe, he added.