Dollar stocks in banks increases

Staff Reporter :
The dollar stocks have increased in the country’s private banks as the Bangladeshi expatriates are sending more remittances ahead of Eid-Ul-Fitr to their family members.
Besides, increase in export earnings in last few months, receiving dollars from the first instalment of the International Monetary Fund (IMF) loans and reduce in import expense have helped remove dollar crisis slightly in the local market, the sector insiders said.
The banks are now allowing opening of letters of credit (LCs) for importing goods, although the situation is yet to be reached the normal time, they said.
Syed Mahbubur Rahman, Managing Director of the Mutual Trust Bank Ltd, told The New Nation, “The situation of dollar crisis has improved slightly but yet to be reached like normal time. Banks are still cautious about opening LCs.”
“However, increase export earnings and remittances have a positive impact on the dollar market. Bangladesh Bank is also monitoring closely to improve the situation,” he added.
The Bangladeshi expatriates have sent $1597.5 million in first 24 days of the current month (March).
The Bangladesh Bank provided dollars to private banks from foreign currency reserves so far. But, now it does not need to supply so many dollars from the reserves due to the improvement of the situation, the central bank sources said.
Businesses, however, alleged that they are still failing to open LCs for importing
raw materials and intermediate goods, which are hampering domestic productions.
Mohammad Hatem, Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, “Industrial sectors are still facing raw materials crisis severely as they are failing to open LCs for import it.”
The commercial banks are not allowing us to open LCs due to insufficient dollars, he added.
Food items and energy supply crisis has became acute due to the Covid-19 pandemic and Russia-Ukraine war. As a result, the prices of the goods have increased unusually in the global markets. Like the other import-dependent countries, Bangladesh fell into a deep crisis.
The trade deficit widened to more than $33 billion as exports did not keep pace with imports and the lack of expected inflow in remittances, the current account balance deficit also continued to increase.
Since the beginning of the dollar crisis in the local market, the central bank depreciated the local currency repeatedly to deal with the crisis.
But the situation starts to improve as the country receipt export earnings around $ 26 billion against the import expense $38 billion in the first six months of the current fiscal year, according to the Bangladesh Bank data.
The inflow of remittances has also crossed $10 billion marks during the time as the central bank takes various steps to increase remittances in legal channel.
The central bank expects that the remittances, one of the major sources of the foreign currency, would cross $2 billion in current month and if that happen, then dollar crisis may remove.