Foreign-exchange dealers and bankers on Wednesday faced regulatory ire for continued depreciation of the local currency against the US dollar-a trend that makes imports costlier and consumer supplies expensive.
Bangladesh Bank (BB) governor Abdur Rouf Talukder at a meeting with them expressed his dissatisfaction over the depreciation of the taka, sources said.
"Such upward adjustment of foreign-exchange rate, almost every month, by banks and BAFEDA (Bangladesh Foreign Exchange Dealers' Association) is fueling inflation in the form of soaring import costs significantly," he said, as the country sees unrelenting price rises.
The governor was chairing the bankers' meeting held at the BB headquarters with top executives of the country's commercial banks attending.
The governor's unhappiness stems from higher inflation that erodes people's real income, especially hitting hard those in limited-income bracket of society.
Seeking anonymity, several top executives of scheduled banks who attended the meeting said the BB governor thinks the gradual depreciation of the Bangladeshi taka against the greenback is fueling the inflation, which stood at 9.69 per cent in July, inching down from June's 9.74 per cent.
"The depreciation is being done only to get $200 million to $300 million more in remittance per month. But it significantly raises the import costs, which plays a major role in enhancing the inflationary pressure on the economy," the governor was quoted as saying to the managing directors and chief executive officers of the commercial banks.
Mr. Talukder was also suggesting the banks and foreign-exchange dealers to look into the matter seriously in the coming days for the sake of the economy, according to the meeting-insiders.
Earlier on July 31, 2023, BAFEDA and the Association of Bankers, Bangladesh (ABB) enhanced exchange rate of the greenback by Tk 1.0 for exporters and Tk 0.50 in terms of remittance.
With the enhancement, the exporters are now getting Tk 108.50 per dollar while Bangladeshi workers working abroad are receiving Tk 109 with effect from August 1.
The central bank governor told the bankers in the meeting that the tendency of capital flight through over-invoicing declined significantly because of tight monitoring of the price quotation by the businesses.
He was also asking the commercial banks to pay serious attention to containing the unofficial fund outflow from the economy through trade transactions, the meeting sources said.
Terming the growing volume of NPLs (non-performing loans) in the banking industry a major challenge, the governor, at the same time, suggested that the bankers concentrate more on reducing the volume of bad loans through intensifying focus in loan approval and recovery stages.
The issue of building a hospital for bankers was also discussed in the meeting and asked to find a proper place for building the healthcare infrastructure.
According to the BB data, the country earned $5.31 billion from exports and $2.20 billion from remittance while it spent around $5.97 billion in the form of paying import bills in June 2023, contributing a little to its balance-of-payments (BoP) situation.
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