Dollar rate in kerb market soars

Exchange rate of the US dollar against the local currency in the open market, known as kerb market, has increased substantially ahead of the Eid-ul-Azha and Puja festivals, traders said.
The US currency rate crossed Tk 81.00 on Wednesday, as demand for the greenback increased significantly to meet higher requirement of a section of traders, who normally bring luxurious items from different countries in bags, they explained.
The upcoming holy Hajj has also contributed to push up the exchange rate of the US dollar against the Bangladesh Taka (BDT) in the kerb market.
The rate of the US dollar normally increases in the kerb market when substantial illegal transactions, like - smuggling as well as under- and over-invoicing, take place, the traders added.
"The exchange rate of the greenback may rise further in the coming days due to lower inflow of the US dollar than outflow," a senior currency trader told the FE.
He said trader groups are now active in purchasing various luxurious items from abroad to ensure their adequate supply in the local market ahead of the two religious festivals.
The greenback was sold in the kerb market in the capital at prices between Tk 81.20 and Tk 81.40 on the day, while the buying rates were Tk 81.00 and Tk 81.20, according to the trader.
"We've sold the US currency at Tk 78.50 more than a month ago," he noted.
The US dollar was sold in the kerb market on Wednesday at a rate, which was higher by Tk 3.0 than the rate offered by the state-owned commercial banks (SoCBs).
In the formal market, most of the SoCBs were selling the greenback at Tk 78.40 and buying at Tk 77.40 on the day, a treasury official of a leading private commercial bank (PCB) said.
He said most PCBs and foreign commercial banks offer higher rates for the US dollar than that of the SoCBs.
"The demand for the US currency has increased suddenly ahead of the Eid, Puja and Hajj," he added.
Talking to the FE, a senior official of the Bangladesh Bank (BB) said the central bank is closely monitoring the market situation, but it cannot intervene directly in the kerb market.
"We've been informed about the higher rate of the US dollar in the kerb market," he said.
He advised interested foreign currency buyers to purchase the US currency from the banks at a lower rate instead of the kerb market.
"It's a temporary phenomenon. We expect that the rate will come down from the first week of September," the BB official noted.
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