Dollar crosses Tk123 amid high demand, export slump

The cost of settling import bills through Letters of Credit (LCs) in commercial banks has risen above Tk123 per dollar, reflecting mounting pressure in the foreign exchange market.

LC settlement rates today (6 April) ranged between Tk123.20 and Tk123.40, up by Tk0.25-0.40 from last week, according to senior officials at several private banks. Just last Thursday, the rate stood at Tk123.05.

Leading industrial groups settled LCs within this higher range, while senior executives from some top-tier groups also told TBS that they paid between Tk123.30 and Tk123.40 for LC settlements.

Bankers attributed the uptick to a slight increase in dollar demand without a full-blown liquidity crisis.

A deputy managing director of a private bank said that despite rising remittances, a decline in export earnings has tightened dollar supply, increasing demand relative to the available supply.

Concerns over a potential spike in global oil prices amid tensions involving Iran have also driven up forward bookings, further adding to demand, said the official 

A senior official of another bank said several banks have already secured forward contracts through June, anticipating higher future costs.

Data from the Export Promotion Bureau (EPB) shows exports dropped 18.07% year-on-year in March. Bangladesh earned $3.45 billion in March 2026, down from $4.25 billion in the same month last year.

Forward booking and fuel price hikes

Bankers also noted a rise in fuel oil import LCs, many of which are being processed through forward booking—contracts that lock in exchange rates for future transactions—creating additional demand in the forex market.

A senior official from Bangladesh Bank said that although remittance inflows have improved, falling exports have widened the gap between dollar demand and supply. Increased imports could further deepen the current account deficit.

The central bank is currently refraining from purchasing dollars from commercial banks, after buying over $5.5 billion through auctions since July of the current fiscal year. Officials warned that continued dollar purchases could drive rates higher.

This is because the Bangladesh Bank intends to keep the dollar rate within an upper band of Tk130 and a lower band of Tk125.

Additionally, in March of this year, the Bangladesh Energy Regulatory Commission (BERC) significantly increased the price of jet fuel used in aircraft.

For internal routes, the price per litre of jet fuel has been raised from Tk112.41 to Tk202.29, marking an increase of Tk89.88 per litre. For international routes, the price per litre has been adjusted from $0.7384 to $1.3216. This represents an increase of more than Tk71 per litre.