Bankers are asked to review the widening spread between sale and purchase rates of the US dollar and forbidden from crossing Tk 1.00 margin, in government bid to tame the wayward forex market.
The central bank issued the instructions at a joint meeting of the Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers' Association (BAFEDA) at the Bangladesh Bank (BB) headquarters in the capital on Sunday with its deputy governor Ahmed Jamal in the chair.
"We've directed the leaders of ABB and BAFEDA to review the spread between selling and purchasing of the US dollar balancing the interests of exporters as well as importers and inform us immediately," BB spokesperson Md Serajul Islam told reporters after the meeting, as dollar price kept shooting up.
A joint meet of ABB and BAFEDA is likely to be held within this week in this connection, a member of BAFEDA told the FE, without elaborating.
Under the fresh review of spread, all the authorized dealer (AD) banks will be allowed to add maximum Tk 1.0 between weighted average selling and buying rates of foreign currencies, another BB official told the FE.
He also said the central bank would extend its support for implementation of the fresh spread that is expected to be recommended by the BAFEDA and ABB.
At the meeting, some bankers informed that the spread should be reviewed considering the higher growth in both imports and export earnings.
The overall import cost stood at $82.49 billion in the outgoing fiscal year (FY) 2021-22 against $60.68 billion a year before while export earnings rose to $49.25 billion from $36.90 billion.
The country's import expenses increased significantly during the period under review as a fresh hike in prices of essential commodities, including fuel oils, on the global market mainly due to the ongoing Russia-Ukraine war.
Actually, the foreign trade, covering import and export, increased significantly in FY'22 amid the gradual reopening of economic activities-both domestic and global-after more than one year of pandemic pause.
"The bankers are now allowed to review the spread applying their due diligence as well as considering the trade volume," a top central banker told the FE while replying to a query.
He also says the central bank will take the next course of action after receiving the recommendations from the stakeholders.
Currently, all the authorized dealer (AD) banks are allowed to keep the spread at maximum Tk 1.0 between selling and buying of the US currency in line with a BAFEDA recommendation.
In September 2006, the BAFEDA had advised its member-banks to maintain the spread at maximum Tk 1.0 for BC (bills for collection) selling and TT (Telegraphic Transfer) cleans buying of the US dollar.
At the same meeting, the latest situation on overall foreign-exchange market was reviewed, saying that the gap between outflow and inflow of the foreign exchange is being reduced gradually.
Higher inflow of remittances along with export proceeds helped reduce such gap, according to the officials. The opening of letters of credit (LCs) for imports dropped to US$1.0 billion in first 11 days of August, according to the BB spokesperson.
At the meeting, the bankers expected that stability on the market would return within 1-2 months following reduction in such gap, he adds.
On the other hand, the banks now fix their exchange rates for smaller and retail transactions, including inter-bank ones, in line with the central bank's advice.
However, larger corporate transactions are priced in line with the much higher sourcing costs of overseas remittance sent by international exchange houses.
The banks quoted maximum Tk 95.05 for the sale of bills for collection, generally known as BC, to their customers for settling import payments on Sunday against Tk 95.00 of the previous working day.
Some banks, however, traded the greenback at rates ranging between Tk 95.05 and Tk 105 for settling the import-payment obligations, ignoring their announced rates, according to market operators.
On the other hand, the banks also quoted the dollar maximum at Tk 94.05 on the day to remitters as well as realised export proceeds or TT clean which was Tk 94.00 on the previous working day.
Some banks, however, collected the export proceeds offering maximum Tk 105 instead of Tk 94.05 the same day to meet their growing demand for the greenback.
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