BAFEDA to announce fresh benchmark for forex rates in two weeks

Siddique Islam The Bangladesh Foreign Exchange Dealers' Association (BAFEDA) will set up a fresh benchmark -- a framework to act as the reference points based on market factors -- within the next two weeks for quoting foreign currency exchange rates to the overseas exchange houses. "Our technical committee will start its work from today (Wednesday) in this connection," BAFEDA Chairman S M Aminur Rahman told the FE Tuesday. He also said the committee, headed by Bashar M Tareq, Treasury Chief of HSBC, Dhaka, will set the benchmark, considering exchange rates of US dollar ranging between maximum Tk 76 and Tk 75 for its selling and buying at customers' level. "Our member-banks will use the benchmark for quoting foreign exchange rate to the overseas exchange houses, engaged in remitting money to Bangladesh," he said, adding that the BAFEDA has taken the decision to stop unhealthy competition about quotation of the rates to the exchange houses. "We should not give any cap on selling-buying rates of the greenback against the local currency," he said while replying to a query, adding that the BAFEDA members are free to quote their selling-buying rates of the US dollar, applying their due diligence. The exchange rates of US dollar eased slightly Tuesday at customers' level against Bangladesh Taka (BDT), following the BAFEDA's announcement in the previous day. The greenback was quoted at an average of Tk 76.0596 Tuesday for bills for collection (BC) selling for opening letters of credit (LCs) against imports. It was quoted at Tk 76.1056 on the previous working day. The exchange rate of US dollar for telegraphic transfer (TT) clean came down to Tk 75.0596 on the day from Monday's Tk 75.1056, the BAFEDA data showed. "We're watching the overall forex market situation closely," a senior official of the Bangladesh Bank (BB) told the FE, adding that the central bank sold US$11 million directly Tuesday to two state-owned commercial banks (SCBs) to meet the growing demand for the greenback. The country's foreign exchange reserve stood at $10.01 billion Tuesday after selling the greenback to the SCBs, he noted. On October 5, the central bank asked the bankers to quote foreign currency exchange rates to the overseas exchange houses, after applying due diligence and considering the situation in the international forex market. Currently, some commercial banks are quoting unusually high rates to the overseas exchange houses to attract more inward remittances, and these rates often exceed the inter-bank foreign exchange market rates, market insiders said.