Eid salami to cost more this year as Cenbank withholds new notes

 Highlights: 

•  Due to the BB withholding new notes, brokers are charging a premium for new notes
•  Tk1000 worth of Tk10 notes costs Tk1700, Tk2000 worth of Tk20 notes costs Tk2700
•  Buyers said the price doubled compared to last Eid
•  Bank note sellers anticipate even higher prices as demand continues to rise

Eid Salami, the cherished cash gift from loved ones, is one of the many joys Eid brings into our lives. However, this year, the cost of Salami has surged as new banknotes have become a pricey commodity. With the Bangladesh Bank withholding its usual release of fresh notes, brokers are charging a premium.

As the central bank has not released new banknotes this year, the open market in the Motijheel bank neighbourhood has seen new note sellers making hay. On top of the general public, even officials from both scheduled banks and the central bank are also purchasing new notes from this market.

In front of the Motijheel Sena Kallyan Bhaban, Taheer, a new note seller, was spotted selling a bundle of Tk10 notes (worth Tk1000) for Tk1700 to a joint director of the central bank.

A dozen other sellers, such as Selina Begum and Golam Mostofa, were seen selling a bundle of Tk20 notes worth Tk2000 for Tk2700. Additionally, a bundle of Tk50 notes (worth Tk5000) was being sold for Tk5800, while a bundle of Tk5 notes (worth Tk500) was being sold for Tk800.

Alif Hossain, another buyer who came from Mugda, told TBS, "I bought two bundles of Tk10 notes to give children Eid salami. I had no choice but to come here, as the central bank is not releasing new notes. But the price is high, more than double compared to the previous Eid."

Note seller Alamgir said, "There are still almost five days left for Eid, and right now, a Tk1000 worth of new notes are being sold for an extra of Tk700- Tk800. The price might go even higher in the next two to three days."

"Every year, for Eid, the government releases almost Tk20000 to Tk30,000 crore in new notes into the market. At that time, we vendors can get them from the bank through various channels. Since the government is not releasing new notes this year, the notes that were in stock have doubled in price."

"I've heard that the interim government is removing old bank notes. But I think it will take many years to completely remove the notes with Sheikh Mujib's image from the market," the broker added.

An additional director of the Bangladesh Bank, who preferred to remain anonymous, said, "Every year, ahead of Eid, relatives ask for new notes as I work at the central bank. We used to get almost Tk1 lakh in new notes every year. But this year, since we didn't get any, I'll have to buy a few thousand Taka worth of new notes from the open market."

Shafiqul Islam, a branch manager of Sonali Bank PLC, said, "Customers are less demanding for new notes this year, knowing the bank won't supply them. We are fulfilling their needs with old notes, and there have been no issues so far."

A source at the Bangladesh Bank's Motijheel office told TBS that there is a connection between bank officials and open market note traders. Bank officers, including those from the Bangladesh Bank, receive commissions based on the sale of new notes.

New notes pass through three stages before reaching the customers. First, bank officers sell the new notes to brokers under commission terms. In the second stage, the brokers gather the money on the street. In the third stage, they hire vendors to sell the money to the general public.

Meanwhile, the Bangladesh Bank has announced that notes bearing new designs will be available in the market by the end of May.

Bangladesh Bank spokesperson Arif Hossain Khan said, "The 2024 July revolution has inspired the design of new notes, but it will take time for them to be released."

He added, "The new notes circulating in the market may have been hoarded earlier. The central bank also can't control this currency transaction, which is illegal. The law enforcement agencies should stop these practices.".