Volatility on the foreign-exchange market rather exacerbated after banks introduced uniform exchange rates as the Bangladesh taka depreciated further against the US dollar Monday under the latest experiment.
The local currency lost its value by Tk 1.0 on the interbank foreign-exchange (forex) market on the day, more than a month after a similar fall, according to market operators.
The US currency was quoted at Tk 96.00 each on the day against Tk 95.00 on the previous working day. It was Tk 94.70 on August 08.
In a string of regulatory measures to manage the wayward market amid a global crunch come the banks-set uniform rates in three stages of foreign-exchange dealings by authorised dealer (AD) banks.
Top bankers in a meet Sunday agreed on the uniform exchange rates in consonance with the desire of the central bank.
The local currency has shed its value by Tk 10.20 or 11.89 per cent to the aggressive dollar since January 2022 amid what is dubbed 'price war'. The dollar traded at Tk 85.80 on January 08 last.
Under the uniform-rates arrangement, the banks offered maximum Tk 108 per dollar on the day to overseas exchange houses for netting in remittances while all types of export proceeds were purchased for Tk 99 from the exporters.
However, the weighted average rate for the sale of bills for collection, generally known as BC, for settling import payments stood at Tk 103.43 on the day, according to a monitoring report, prepared by the Bangladesh Foreign Exchange Dealers' Association (BAFEDA).
The BEFEDA calculated the weighted average rate considering the exchange houses and the exporters' rates offered by 37 banks out of its 55 member-banks until 4:00 pm on the day (Monday).
Talking to the FE, a senior member of the BAFEDA said the weighted average rate for BC selling to settle import-payment bills might fall in the days ahead for adjustment of previous rates.
Actually, this weighted-average rate will be calculated on a five-day rolling-average basis by each bank based on its actual cost of inflow of the greenback.
"We expect that such rate will fall by the end of this week after completing the adjustment," the BAFEDA says in explaining the initial paradox.
In case of settling import-payment obligations, the banks are allowed to keep highest Tk 1.00 as spread over the weighted average of the exchange houses and the exporters' rates, according to the guidelines issued Sunday by the BAFEDA and the Association of Bankers, Bangladesh (ABB).
The BAFEDA and the ABB expect that when all export proceeds and all inward remittances are bought at Tk 99 and Tk 108 respectively, and the selling rate is calculated on the weighted-average cost of these two, an 'interbank rate' will eventually emerge around this weighted average cost line.
Meanwhile, the central bank is providing the US dollar as foreign-currency liquidity support to the AD banks continuously for managing the forex-market bucks.
As part of the ongoing moves, the central bank sold $65 million more directly to four commercial banks on Monday at Tk 96.00 instead of Tk 95.00 earlier to help them meet a growing demand for the greenback as global price rises have led to import-cost escalation with its resultant pressures on reserves of Bangladesh, as also of many other countries.
Asked about Monday's depreciation of the local currency against the greenback, a top central banker said the BB is watching the market closely for bringing its stability.
"We'll act in line with the market requirements," the central banker said, without elaborating on their follow-up course.
The central bank has so far injected $2.82 billion from the reserves directly into commercial banks as liquidity support for import payments in the current fiscal year (FY), 2022-23.
In FY22, the central bank sold $7.62 billion from the reserves to the banks for the same purpose.
Actually, the local currency is maintaining a depreciating trend mainly due to higher outflow of foreign exchange compared to the inflow in the last few months.
Besides, Bangladesh's forex reserves have maintained a downturn in the last couple of months - following higher import-payment obligations amid global price rises.
The forex reserves stood at $37.12 billion Sunday against $37.06 billion of the previous day. It was $46.20 billion in September 2021.
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