To stabilise the dollar market, Bangladesh Bank has implemented new measures, including a maximum difference of Tk1 between buying and selling rates.
Additionally, all importers must buy dollars at the same rate, while banks must also purchase dollars from remittance and export earnings at a uniform price.
These rates must be displayed on digital boards in bank branches, according to a directive issued on Thursday (3 January) by Bangladesh Bank.
On Thursday, banks traded $2.25 million at a rate of Tk122, according to data on Bangladesh Bank’s website, resulting in an import rate of Tk123 per dollar.
Despite a four-month period of stability under the interim government, the last 15 days saw renewed instability in the dollar market, driven by unhealthy competition among banks to buy remittance dollars.
Consequently, the dollar rate surged to a peak of Tk127-128.
In response, Bangladesh Bank has sought to align dollar pricing more closely with market rates, bringing stability back to the market, and boosting reserves due to increased remittance and export earnings, while reducing outstanding import liabilities.
The directive stipulates that the difference between buying and selling rates for dollars must not exceed Tk1.
Uniform pricing is mandated for all dollar purchases within a day, affecting banks that accumulate large amounts of dollars from remittances and exports, including freelancers.
The directive also demands uniform dollar pricing for all importers.
Previously, BB Governor Ahsan H Mansur indicated that the dollar rate could increase by up to 2.5% from the Tk119 base, allowing a buying price of up to Tk122.
Banks are required to adhere to these instructions and regularly inform Bangladesh Bank of dollar transactions.
Non-compliance will result in punitive actions, including fines, as stipulated by the Bank Company Act and the Foreign Exchange Regulation Act, with additional penalties possible.
Furthermore, a directive issued on 3 January allows authorised dealer branches to set foreign exchange rates through discussions.
Effective from 5 January, authorised branches must report dollar transaction data to Bangladesh Bank twice daily.
Transactions exceeding $100,000 must be reported by 11:30am, while all transactions between 11:00am and 5:00pm must be reported by 5:30pm.
Starting 12 January, Bangladesh Bank will publish a daily reference price based on transaction data, available on its website.
International Monetary Fund (IMF) had recommended market-based dollar pricing by the end of 2024.
In line with this, Bangladesh Bank recently held a meeting with the managing directors and treasury heads of the top 27 foreign exchange trading banks, outlining various strategies that were later formalised in the directive.
BB Governor Mansur warned of severe punitive actions against those trading dollars above declared rates.
