Dhaka’s kerb market money exchangers losing out on customers
In the backdrop of the dollar shortage, the greenback is sold at much higher prices. This has a ripple effect and money exchange businesses seem to be at the forefront
Taharat Islam, the proprietor of Hamim Enterprise came into the money exchange business through his elder brother around seven years ago. His brother, by now, switched careers, but Taharat stuck to money exchange.
A few good years after Taharat joined the business, the Covid-19 pandemic loomed on the horizon and like most other sectors, Dhaka's money exchangers also braced for the impact.
"Our business has a relationship with air flights. When the pandemic-induced closure of air flights stagnated the world, our business dried up," Taharat said, "after the pandemic somewhat receded, things started to pick up as people began to travel again, and businesses, imports and exports boomed around the world."
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But in the last few weeks, like hundreds of other open exchangers in Dhaka, Taharat stumbled upon a new crisis as the dollar shortage led to a steep devaluation of taka.
As a result, Dhaka's kerb market money exchangers said that they are losing out on customers.
"We have been badly impacted because we are losing customers," Taharat said, adding "We buy and sell the currencies to and from the customers. When the rate is stable, we feel good doing business.
Buying and selling at a fixed rate create a suitable environment. But when the rate varies too much, our trouble has no end. We remain confused about whether we should buy or not, or will the rate further increase or fall.
When the price unnaturally increases, the customers delay their purchases to see when the market stabilises. This is how our business gets impacted.
Within the last month, all the major currencies' prices have increased. For example, the Saudi Riyal is selling at Tk25.5 [Monday] which was sold at Tk23.90 before Eid. These are reducing our business because the customers feel like it is risky."
On Monday when we visited the open market in different places in Dhaka, the dollar was selling at Tk96.70 by the afternoon and Tk98.30 later the same day.
Some exchangers told us that their sources said it could reach up to Tk100 per greenback soon.
The prophecy materialised the next day as the price of the dollar indeed hit a century on 17 May, Tuesday. However, it came down to Tk98 in the curb market just a day after the dollar was traded for around Tk103.
Thanks to the strengthening of the dollar index, aggressive rates hike by global central banks, the surge in crude oil prices and skyrocketing import prices, Bangladesh's currency has lost value by more than Tk7 against the greenback in only around seven days in the kerb market.
This shock has been unprecedented not only among common people, but even the money exchangers who have been in this line of work for years admitted to The Business Standard that they have never witnessed anything like this before.
"I have been in this business for 20 years, but never have I seen the dollar price rising so high. A rise of 50 paisa, or even Tk1/Tk2 is fine. It keeps rising and falling at that level. But rising over Tk7 all of a sudden is unprecedented," said a money exchanger named Sumon at Ratul Money Exchange in Gulshan Shopping Center.
"Because of the high dollar price being high, people are not buying these days, businessmen who used to invest large amounts have stopped investing. Consequently, our business has dropped to one-fourth," Sumon added.
Sumon is also aware of the ripple effects of devaluing taka that impact all the citizens. "It is not only our business. You are feeling the impact too. Aren't you? The prices of everything are rising and they will keep rising," he added.
Another exchanger from Gulshan Shopping Centre, who requested to remain anonymous, said that amid the skyrocketing prices and fewer customers what troubled the money exchangers are the customers continuously asking them questions because they believe it is the exchangers' syndicate that raised the dollar price.
"They are constantly asking why dollars' prices are increasing so much. I buy and sell the dollars from the market and make around 10 paisa profit. The fluctuating market doesn't earn us anything. But the customers keep asking us," he said.
At this surging rate, he said, "it is natural that the customers' number will drop. Suppose now you want to go abroad. Come buy $1,000. It will automatically reduce your amount by Tk10,000 at the current rate. Similarly, if I have to buy a product of Tk90 at Tk95, for each $10,000, I get to invest Tk50,000 more."
Normally the internet shows the exchange rate well below Tk90, but it is somewhere between Tk98 to Tk100 in the kerb market these days. Most people follow the internet. And hence an argument ensues when they come to exchange in the open market.
"We don't control the dollar. The rate we sell at is set by the Bangladesh Bank," this is what all the exchangers based in Fakirapul, Gulshan 1 and 2 told us.
But the Bangladesh Bank website indeed, on Thursday, showed Tk87.50 per greenback which was the official rating.
The banks, under the backdrop of the dollar shortage, however, are selling dollars at much higher prices (selling at around 98, buying at 96 on Thursday) while the kerb market price is a little lower (Tk97.5 per dollar on Thursday) than the banks.
An industry insider told The Business Standard that like the bank selling at higher prices, the exchangers also set their common rate which some of them display on their monitors through an IT system they built.
Humayun Kabir, the proprietor of Khan and Chowdhury Money Changer at Metropolitan Shopping Plaza, said that they still have customers with small amounts but "our main customers, the business people who are in lift business for an example, or who bring products from China and need a larger amount of dollars, are not coming these days."
Humayun added that in 22 years of his business in money exchange, he has never seen such an abrupt rise in dollar price before.
Although some exchangers tried to quip on the country surely turning into a Sri Lanka during our conversation, most exchangers, however, are hopeful that their days will turn around.
"People come to us because exchanging in banks is complicated. It may take hours in banks that we do in like 15 minutes. Our business will overcome this challenge when the market stabilises," said an exchanger named Rofiq, who introduced himself as the proprietor of Good Deed Money Exchange in Fakirapul.
Taharat Islam is also hopeful that things will turn around. "When the dollar price is low, our business is better," he said.
