The Bangladesh Bank (BB) has withdrawn the provision of a fixed rate of dollars for remittance and Letters of Credit (LC).
The central bank on Thursday backtracked on its earlier decision after the expatriate income was low and exporters did not renew their bills after the bank set a single dollar rate of Tk 89 on Sunday.
However, the central bank will sell dollars at a fixed price, said a Bangladesh Bank senior official.
Banks will be able to set their own dollar prices in line with the market, he added.
Serajul Islam, spokesperson for the Bangladesh Bank, said, “Banks will fix the dollar price keeping in view the market and considering the demand. This decision has been made effective from Thursday.”
Explaining why the decision was made, he said, “Banks said that those who are sending remittances do not think the dollar rate is right. Therefore, banks will set the dollar rate depending on the competitive market.”
However, the banks have been asked to keep a watchful eye on the sudden rise in the value of dollar, he said, adding that foreign exchange houses have been asked to be careful not to raise prices too much.
“The decision was taken considering a decrease in remittance inflow through formal channels and the plight of exporters. The rate has been left to be fixed according to the market price to give priority to the foreign currency earners amid the volatile condition of the international market," Serajul Islam said.
However, Bangladesh Bank had fixed the price last Sunday as the greenback continued to rise. The interbank transaction dollar rate was Tk 89 while at the import stage and remittance it was fixed at Tk 89.15 and Tk 89.20.
The expatriate income decreases after fixing the price. Exporters are also not cashing in on export bills at fixed prices. As a result, some banks are in crisis to meet the import bill.
In such a situation, Selim RF Hussain, managing director and chief executive officer (CEO) of Brac Bank Limited and Chairman of the Association of Bankers Bangladesh (ABB) discussed the overall situation with the concerned persons including Governor of Bangladesh Bank Fazle Kabir on Wednesday evening. At this time the real situation is highlighted. That is why Bangladesh Bank agreed to lift the dollar price limit.
