Central bank raises its dollar selling rate by Tk1

The Bangladesh Bank has raised the rate of dollars sold from its reserves by Tk1 to Tk99 on Monday.

Earlier, in November, the central bank set the dollar selling rate at Tk98, an increase of Tk1 from Tk97 set in October.

Seeking anonymity, a treasury department official of a government bank told The Business Standard, "We collected dollars at Tk98 for more than two weeks. On Monday, the rate was increased to Tk99. We purchased around $10 million from the central bank on Tuesday."

Sources say the central bank sold $67 million to the state-owned banks on Tuesday.

The Bangladesh Bank has increased the dollar price 10 times since July of the current financial year.

According to the central bank, $6.60 billion has been sold from reserves in about five months of the current financial year. Reserves stood at around $33.98 billion at the end of the day on Tuesday. In 2021-22, $7.62 billion was sold from reserves.

The central bank has termed the rising rate of dollars sold from its reserves 'the selling rate of the Bangladesh Bank' mentioning the

Tk1 increase as an adjustment with the market. Earlier, the increase of the dollar selling rate was generally considered as 'currency devaluation'.

A senior official of the central bank, who did not want to be named, told TBS that when the central bank increases the price of selling dollars from the reserve, it is a form of 'currency devaluation'.

Earlier, the rate at which the central bank sells dollars to banks was regarded as 'the interbank exchange rate'. Banks used to trade dollars among themselves at this price.

However, due to the ongoing dollar crisis, this rate became somewhat ineffective and banks started refraining from dollar transactions among themselves.

In this situation, the central bank tried to control the situation by devaluing taka several times.

At the beginning of the current year, the interbank exchange rate of dollars was Tk85.8, which increased to Tk95 as of 11 September with several devaluations.

From 12 September, the central bank began to publish the highest and lowest rates of dollar prices in interbank transactions on the website instead of its selling prices.

Since then, the price at which the central bank is selling dollars are no longer being published on the website.

According to the latest information on the Central Bank's website, from 5 December, banks traded dollars among themselves at Tk102.69 to Tk107.

According to the Weighted Average Rate of the Bangladesh Foreign Exchange Dealers Association (BAFEDA), the banks have bought dollars at a rate of Tk100 to Tk106.50. Banks can sell dollars in LC settlement adding a maximum profit of Tk1 from this purchase rate.

Besides, there are several other rates of dollars in the current market. In line with the decision of the BAFEDA and the Association of Bankers, Bangladesh (ABB), the banks offered a rate of Tk100 for export proceeds and Tk107 for remittances.