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Forex mkt volatility

BB to ask 10 more banks to show cause

Siddique Islam | November 09, 2018 00:00:00


The central bank is set to issue show-cause notices to 10 more banks soon for allegedly providing misleading information about foreign exchange rate, particularly for importers.

"We'll issue the show-cause notices based on the findings of our investigation conducted in the port city recently," a senior official of the Bangladesh Bank (BB) told the FE on Thursday.

He also said the central bank will take necessary action against the banks after examining their responses.

The BB probe team found that the banks reported the BC (Bill for Collection) selling rate at Tk 83.85 to the central bank, although they sold the greenback to the importers at rates ranging from Tk 84.00 to Tk 85.50.

Two foreign commercial banks, five fourth generation banks, one state-owned commercial bank (SoCB), one third generation bank and another first generation bank are among the banks to face the central bank action.

The Bangladesh Taka (BDT) maintained a deprecating mode against the US currency in recent months mainly due to short supply of the greenback in the foreign exchange (forex) market.

Some overseas exchange houses and exporters have taken such an opportunity, offering higher rates on their greenback, according to market insiders.

The banks are forced to buy such greenback because they are facing short supply of the US dollar, they said.

In that situation, some banks are procuring the US dollar at higher rates from overseas exchange houses and exporters and are selling the greenback in the name of 'corporate deal' ranging between Tk 85.00 and Tk 85.90 with a minimum profit to the importers, they added.

"The central bank should look into such higher rates, offered by overseas exchange houses and exporters, like BC selling rates for importers," a senior treasury official of a leading private commercial bank told the FE.

Earlier on October 28 last, the central bank issued show-cause notices to nine banks on the same ground.

The central bank is now scrutinising the responses by nine banks on their alleged attempts to mislead the BB with 'false information' about foreign exchange rates offered particularly to the importers.

In response to show-cause notices, the banks had clarified their positions on the allegations and sought exemption from the allegation, according to another BB official.

"We'll decide the next course of action after completing scrutiny of the clarifications earlier submitted by the banks concerned," the central banker added.

The demand for the US dollar is increasing gradually, mainly due to higher import payment pressure, particularly for the petroleum products and capital machinery, according to the market operators.

The central bank has been providing its foreign exchange support continuously through selling US dollars to the banks for settlement of the import bills.

As part of the move, the central bank directly sold US$40 million at market rate to four SoCBs on Thursday to meet the growing demand for the greenback.

"We've sold the foreign currency to the banks to settle outstanding letters of credit (LCs) against imports, particularly of fuel oil and capital machinery for power plants," the BB official added.

The central banker said that such liquidity support might continue in the coming days in line with the market requirement.

A total of $500 million has been sold to the commercial banks since July 01 during the current fiscal year, as part of its ongoing support, the BB data showed.

The US dollar was quoted at Tk 83.85 in the inter-bank foreign exchange market on Thursday, unchanged from the previous level.

siddique.islam@gmail.com


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COMPANY YCP HIGH LOW CLOSE %CHG
ORIONINFU 53.4 58.7 53.6 58.7 9.9251%
SKTRIMS 39.3 43.2 40.0 43.2 9.9237%
JMISMDL 183.6 201.9 182.6 201.3 9.6405%
WATACHEM 445.9 484.9 449.8 484.9 8.7464%
GEMINISEA 309.0 336.0 295.0 336.0 8.7379%
ARAMIT 384.8 418.4 385.0 418.4 8.7318%
SONALIANSH 359.9 391.3 365.0 391.3 8.7246%
KOHINOOR 415.9 452.2 412.6 452.1 8.704%
UPGDCL 275.7 299.8 278.0 298.6 8.3061%
AL-HAJTEX 77.1 84.0 76.3 82.9 7.5227%
COMPANY YCP HIGH LOW CLOSE %CHG
AMBEEPHA 610.0 610.0 539.0 552.0 10.5072%
GEMINISEA 336.0 336.0 295.0 305.1 10.1278%
ORIONINFU 58.7 58.7 53.6 53.7 9.311%
JMISMDL 201.8 201.9 182.6 185.0 9.0811%
ARAMIT 418.4 418.4 385.0 385.0 8.6753%
SHEPHERD 40.3 41.6 37.3 37.3 8.0429%
SKTRIMS 43.2 43.2 40.0 40.0 8%
KOHINOOR 452.2 452.2 412.6 418.8 7.9752%
WATACHEM 484.9 484.9 449.8 450.0 7.7556%
SINOBANGLA 51.5 51.5 47.8 47.8 7.7406%
COMPANY YCP HIGH LOW CLOSE %CHG
BXSYNTH 7.0 7.5 6.3 6.4 -8.5714%
KDSALTD 60.3 58.0 54.6 55.7 -7.6285%
MLDYEING 45.1 48.2 41.6 42.0 -6.8736%
TOSRIFA 24.9 26.3 23.0 23.4 -6.0241%
MEGCONMILK 25.2 25.0 23.4 23.7 -5.9524%
STANDARINS 27.3 27.8 24.6 25.7 -5.8608%
FEKDIL 16.4 16.8 15.2 15.5 -5.4878%
HAKKANIPUL 70.6 71.6 66.0 67.0 -5.0992%
SONARGAON 19.7 19.9 18.2 18.7 -5.0761%
ASIAPACINS 20.1 20.4 18.8 19.1 -4.9751%
COMPANY YCP HIGH LOW CLOSE %CHG
BXSYNTH 6.7 7.5 6.3 7.5 -10.6667%
TOSRIFA 23.5 26.3 23.0 25.8 -8.9147%
MLDYEING 42.0 48.2 41.6 46.0 -8.6957%
SPCERAMICS 14.2 15.4 14.1 15.4 -7.7922%
SONARGAON 18.4 19.9 18.2 19.8 -7.0707%
FEKDIL 15.4 16.8 15.2 16.4 -6.0976%
MEGHNAPET 16.0 17.5 15.4 17.0 -5.8824%
GQBALLPEN 69.1 73.4 68.5 73.4 -5.8583%
EMERALDOIL 9.7 10.4 9.7 10.3 -5.8252%
HAKKANIPUL 66.8 71.6 66.0 70.7 -5.5163%