The central bank on Tuesday issued a fresh directive for quoting rates to the overseas exchange houses engaged in remitting money, aimed at reining in volatility on the forex market.
The authorised dealer (AD) banks have been asked not to quote higher than the BC (bills for collection) selling rate under any circumstance, according to the directive issued by the Bangladesh Bank (BB).
Besides, the banks will have to provide information on purchasing foreign currency from the overseas exchange houses as per the prescribed format on a daily basis from now on.
The BB's latest move came against the backdrop of volatility in the forex market in the recent months as some banks were allegedly quoting higher rates to their customers bypassing the announced rates.
At present, some commercial banks are quoting unusually high rates to the overseas exchange houses to collect more inward remittances and these rates are also responsible for increasing volatility in the market, according to the market insiders.
They also said some banks offer higher rates ranging between Tk 95 and Tk 96 for attracting remittances from the overseas exchange houses, but ignoring the inter-bank rates or BC selling rates.
The US currency was quoted at Tk 87.90 each on the inter-bank market on Tuesday -- unchanged from the previous level -- while the rate for the sale of bills for collection, generally known as BC, was Tk 88.00.
Bangladesh Foreign Exchange Dealers' Association (BAFEDA) has already submitted six-point proposals including maintaining a benchmark in quoting foreign-currency-exchange rate to the overseas exchange houses to the central bank for stabilising the ongoing volatility.
As per the BAFEDA's suggestions, the exchange rate to be quoted by the authorised dealer (AD) banks for overseas exchange houses will be Tk 0.10 less per US dollar than that of the inter-bank rate.
Earlier, the central bank had asked the bankers to quote exchange rates to the overseas exchange houses after applying due diligence and considering the situation on the inter-bank forex market.
Talking to the FE, the treasury head of a leading private commercial bank said it will help stabilise the market with establishing a uniform rate-quoting system to the overseas exchange houses gradually.
"The banks will have to follow the BB's latest formal directive, else they may face regulatory actions," the senior banker said.
Meanwhile, the central bank continued its liquidity support in a bigger way to the scheduled banks to manage the volatility.
As part of its move, the BB sold $125 million directly to six banks on Tuesday.
Earlier on Monday, the central bank sold $130 million to one state-owned commercial bank (SoCB) along with three private commercial banks (PCBs) on the same ground.
The central bank may provide such liquidity support to the banks continuously in line with the market requirement, according to a BB senior official.
In the current fiscal year (FY 2021-22), The central bank has so far sold $5.76 billion from the reserves directly to the commercial banks to facilitate settling their import-payment obligations. The local currency lost its value by Tk 2.10 or 2.45 per cent since January 2022. The dollar was traded at Tk 85.80 on January 08 last.
© 2024 - All Rights with The Financial Express