Banks settle LCs at Tk102 per dollar

The banks settled import letters of credit (LCs) at Tk101.6-102 per dollar on Wednesday.

Sources at the commercial banks said the value of the dollar has increased by about Tk2 in the last one week.

One week ago – on 13 July – the banks settled import LCs at Tk100 per dollar.

Large exporters had to pay Tk98-99 per dollar for encashing their export proceeds. Also, the banks had to pay Tk101 per dollar to collect remittances from the exchange houses.

Officials of the treasury department of several banks told The Business Standard that currently there is a huge demand for dollars in the market, but it is not available. Even the Bangladesh Bank cannot meet the banks' demand. Due to these reasons, the banks have to depend on the foreign exchange houses, which are selling dollars at a high price.

Many banks could not collect dollars even after giving exchange houses a rate of Tk100.50 on Wednesday.

Many exporters have encashed their export proceeds before Eid, so currently they are not coming for dollars. The demand for dollars cannot be met with the lowered flow of remittance and the bankers do not see any possibility of overcoming this crisis in near future.

A head of the treasury department of a bank told TBS, "We are getting a lot of orders to open large LCs as sectors like capital machinery, ships and fertilisers sectors are now trying to open LCs. As the amount of required dollars is very high, we have been struggling to settle these LCs. In some cases, we are trying to discourage the traders."

Stating that the LC settlement rate for small amounts is low, he added, "We have to face problems in the LC settlement of large amounts, because we do not have so many dollars. As the dollar is bought at Tk101 from the exchange houses, the settlement has to be charged more."

To reduce the crisis, the central bank is regularly selling dollars from the reserves. It sold $15 million at the rate of Tk93.95 yesterday. More than $700 million has been sold from the reserve so far in July of the current fiscal year.

Recently, the commercial banks have been asked to inform the central bank about imports worth more than $5 million 24 hours before opening the LC. As a result, the central bank officials hope to reduce the crisis somewhat.

Meanwhile, the Bangladesh Bank has suspended the opening of import LCs of around $45 million of five institutions on Tuesday.

A senior official of the central bank said that LCs have been blocked as there were some irregularities. They will be cleared if the bank provides proper documents.

Meanwhile, customers had to spend Tk102.30-102.50 to buy dollars from the kerb market on Wednesday.

Besides, the money changers collected dollars at the rate of Tk102. Dollars were traded at the same price on the previous day in the curb market, money changers in Motijheel, Paltan and Baitul Mukarram areas of the capital told The Business Standard.