Now the US dollar becomes dearer as Bangladesh Bank Tuesday raised the regulatory exchange rate by Tk 1.50 to Tk 104.50 in a readjustment process falling in line with a recommendation.
Economists say costlier trading currency may mean costlier imports and pricier consumer goods -- and a further possible push in inflation.
Officials concerned said the policy-rate raise came as part of a plan to up the exchange rate of the US currency further to cross Tk 105 each by June in line with suggestion from the International Monetary Fund (IMF) for reaching a uniform exchange rate of the dollar on the market.
The latest enhancement in the exchange rate of the dollar, sold from the country's forex reserves, came a couple of days after the Bangladesh Foreign Exchange Dealers' Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB) had increased the exchange rate on export proceeds and remittance by Tk 1.0 to Tk 106 and Tk 108 respectively.
Confirming the development, a BB official said the central bank raised the exchange rate by Tk 1.50 to reach Tk 104.50 to minimise the difference among existing multiple rates.
He said the BB planned to ensure a unified dollar rate on the forex market and the latest revision was a part of the process.
Even in the half-yearly Monetary Policy Statement (MPS), announced last month, the central bank mentioned that the difference in the regulated rates would be maximum two-percentage points.
As part of the parity move, the BB raised the dollar-taka exchange rates several times in the past months. The rate was Tk 96 on September 12 last year.
Following consistent rise in the rates, the BB is now selling the dollar to the banks at Tk 104.50 each, which is planned to be revised further upward to cross Tk 105 by June next.
Seeking anonymity, another BB official said they are going to raise the rate further to Tk 106 in the coming month.
Citing the MPS, the official said, "There is need to reach the goal anyhow by coming June so that the MPS target of keeping the difference in rates two-percentage points is achieved."
Apart from the BB-charged rate, there are varied exchange rates on the money market. These are Tk 106 for exporters and Tk 106 for remitters.
In terms of import, the rate is calculated on the basis of weighted average of the rates for export and remittance by adding up Tk 1.0 each, according to the BB.
The central banker said one of the suggestions of the International Monetary Fund was letting the market determine the rate, in what is called free float of the currencies.
"If we can reach the targeted rate by June, we'll be very close to the unified market rate," the official adds.
Dr Masrur Reaz, Chairman of Policy Exchange Bangladesh, thinks the hike will push up inflation in the form of raising production costs for shorter period of time.
But in the longer period of time, it will help control inflation through ensuring stabilization of the exchange rate, he forecasts on the impact of the exchange-rate rise.
"We need to further reduce the existing difference in rates and try to reach a single rate that will be market-driven," he says.
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