The US dollar has surged to Tk 125 in the informal market, commonly known as the kerb market, after the Bangladesh Bank introduced the crawling peg system, a flexible exchange rate system.
The central bank on Wednesday devalued the local currency by Tk 7 to Tk 117, the sharpest slide in a day against the US dollar.
The steep rise in the dollar price has not only impacted the kerb market but has also affected the opening of letters of credit (LCs).
Not only curb market traders, banks have also increased the USD rate in case of opening of letters of credit (LCs). Some banks have raised the rate by Tk 3-4 from the previous rate, according to industry insiders.
Even it put impact on the exchange rates of other currencies.
After visiting different money exchanges in the capital’s Fakirapool, Paltan and Motijheel areas on Thursday, this correspondent found that the US dollar was being sold at Tk 125 or more than the rate.
Most of the money exchangers kept mum about the selling price of dollar. “We have yet to decide at what rate we will sell them,” one of the money exchangers said.
However, few of them have said that they will start selling dollar at Tk 125 in the evening.
Preferring anonymity, a money exchanger told Bangladesh Post at Baitul View Tower in the Paltan area, “Even on Wednesday morning, we sold dollar at Tk 117 to Tk 118, but following the new circular of the central bank, the dollar rate hit Tk 119 to Tk 120. But it climbs as high as Tk 125 today.”
Meanwhile, money exchangers are also asking higher price for exchange rates of other currencies, including pound sterling, Indian rupees and Saudi rial.
Officials of most of the money changers said that Indian rupee was Tk 1.40 till Wednesday, but now it is being sold at Tk 1.50.
The Bangladesh Bank on Wednesday introduced the crawling peg exchange rate system and allowed banks to buy and sell US dollars freely near Tk 117. The gap between the formal and informal exchange rates was low in the last few months. But following the announcement about the new rate, such volatile situation has been created in the kerb market.
Since the end of last year, the International Monetary Fund (IMF) has been suggesting introducing the crawling peg system to determine the exchange rate of the dollar.
Earlier, the Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of
Bankers Bangladesh (ABB) have collaborated with the central bank to determine the exchange rate of dollar for import and export transactions. But from now on, both BAFEDA and ABB cannot play a role in determining the dollar rate for introducing the crawling peg exchange rate system.
Economist Dr Khondaker Golam Moazzem told media that the crawling peg system is projected to foster stability in the dollar market in future.
He also emphasised the importance of effectively managing out-of-market transactions in this regard.
