Dollar rate for export proceeds hiked by Tk1, remittance rate raised by Tk0.50

The Bangladesh Foreign Exchange Dealers Association (Bafeda) and the Association of Bankers, Bangladesh (ABB) have once again adjusted the exchange rate of the US dollar, increasing it by Tk1 for export proceeds and Tk0.5 for remittances and import settlements.

As per an announcement made by Bafeda and ABB during a meeting on Monday, exporters will get Tk108.50 per dollar instead of Tk107.5, while the rate is Tk109 for remittances and Tk109.5 for import settlement.

Selim RF Hussain, chairman of the ABB and managing director and CEO of Brac Bank, confirmed the new dollar rates to The Business Standard and said banks will execute the new rates from 1 August.

The managing directors of several banks told TBS that there was no discussion at the meeting, only the rates fixed by the central bank were notified.

According to data from the central bank, Bangladesh received $1.75 billion in remittances through banking channels in the first 28 days of July this year. 

In June, remittance receipts stood at $2.20 billion. 

Remittances totalled $21.61 billion in FY23, up by 2.75% over the previous fiscal year.

Bankers say inward remittances should increase due to the increase in the dollar rate for remittances.

The MD of a bank present at the meeting told TBS that banks can make a maximum profit of Tk1 per dollar. But no bank can charge more than Tk109.50 rate for import settlement or dollar sale from one bank to another bank.

Explaining the matter, he said if a bank's cost of buying dollars is Tk108, that bank can sell dollars at a maximum of Tk109. However, if the average cost of buying a dollar for a bank is Tk109, that bank can sell a dollar at a maximum of Tk109.50.

In the previous meeting last month, the interbank dollar rate was fixed at a maximum of Tk109. 

Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed appreciation for the higher dollar rate for export proceeds. 

However, he also highlighted the challenges the garment industry is facing due to increased production costs, including energy costs such as gas and electricity, which have doubled in some cases. Additionally, export orders have declined, and there are concerns about paying staff salaries and utility costs.

It is worth noting that on 12 September last year, the dollar price for remittances was set at Tk108, while it was Tk99 for exporters. Since then, Bafeda and ABB have increased the dollar price for exporters 12 times and changed the exchange rate for remittances six times.

A managing director of a private commercial bank raised concerns about some banks not adhering to these dollar rates and instead collecting remittances at higher rates. Furthermore, certain banks are charging elevated dollar prices in import settlements, leading to increased import costs and potential inflationary pressures, the MD added.