Remittance dollar price cannot exceed Tk115 : ABB-Bafeda
Business Report :
The Association of Bankers’ Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers’ Association (Bafeda) have directed banks not to pay more than Tk115, including government and banks’ own incentives, per dollar rate for remittances.
The decision was announced at a joint meeting of the ABB and the Bafeda on Wednesday (8 November) after several media reported that banks were buying remittances at Tk124.
ABB and Bafeda members said in the meeting that currently many banks are buying remittance dollars at an extra price, which will in turn affect inflation and forex reserves.
They mentioned that the state will suffer due to buying remittances at high prices. “In a meeting on 31 October, the ABB and the Bafeda instructed the banks to bring in remittances with arbitrary incentives beyond the fixed dollar rate,” a senior official of a bank, who was present at the meeting said on condition of anonymity.
“It was also said at whatever price a dollar is bought, it has to be sold to customers at Tk111. Immediately after this announcement, banks started buying dollars at higher prices.
“Last Wednesday, exchange houses quoted a remittance rate at a maximum of Tk124, significantly higher than the official set rate of Tk110.50.
“However, it was said in the meeting, banks have been instructed to give incentives as they wish from their own funds, but they should not give incentives more than 2-2.5% per dollar,” he added. While talking, the managing director of a private commercial bank, wishing not to be named, said the huge gap between buying and selling rates is fostering corruption. “If we purchase remittances at Tk124 per dollar and sell to importers at Tk111, then we will have to make a loss of at least Tk130 crore in a month,” he said, adding that to avoid such losses, his bank would have to go for underhand dealings with importers and sell dollars at the remittance rate. However, this would necessitate his bank’s officials handling large sums of cash.
The managing director of another private bank told TBS that there are many banks that have a high demand for dollars. They are buying dollars at higher prices to settle the import LCs they have opened in the past.
The dollar rate increased to Tk114 in the middle of last year. After that, the banks have been fixing the dollar rate since September 11 last year through the mediation of Bangladesh Bank. As part of this process, initially the dollar rate was fixed at Tk108 for remittances and Tk99 for exports. Periodically, the dollar buying rate is equalised in both cases.
Besides fixing the dollar rate to control high inflation, the central bank has been selling a lot of dollars from the reserves. The current financial year has already sold about $4.5 billion dollars. Last fiscal year, sales were $13.58 billion dollars. The previous fiscal year was $7.62 billion dollars.
