Export proceeds dollar price raised by Tk1 to Tk101

The Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers' Association (Bafeda) raised the dollar price for export proceeds by Tk1 to Tk101.

Exporters have been availing the price from 4 December after it was fixed at a meeting of the ABB and Bafeda held on 30 November.

According to a circular of Bafeda, all export proceeds and other inward remittances including commercial remittances (other than wage earners and white collar NRB's remittances) will be bought by banks at a fixed rate of Tk101 per dollar.

This is the third time that the dollar price for export proceeds has been increased. Earlier, the ABB and Bafeda raised the dollar price from Tk99.50 to Tk100 for export proceeds.

Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The Business Standard, "The banks started to provide dollars at Tk101 for export proceeds. However, for payments against raw materials import we are paying Tk107-Tk108 per dollar. The difference of Tk2 in dollar prices between the export proceeds and import payment is manageable. But we are conceding losses as the difference is higher."

Some banks paying higher prices for remittances

Meanwhile, several private banks in the country have been accused of collecting remittances at a higher rate than Tk107 per dollar fixed by the authorities.

The allegation appeared as a document of an exchange house named Placid Express showed that two private banks offered Tk107.50 per dollar to a customer coming from the USA. But according to the decision of the bankers, no bank can pay more than Tk107 per dollar to collect remittances.

As per the document, a second generation Islamic Shariah-compliant bank offered a rate of Tk 107. The remaining 16 banks in that list wanted to buy remittance dollars at a rate of Tk102.50.

As a result, one of the two banks that offered higher prices succeeded in buying the remittances from the exchange house.

The ABB and Bafeda decided to buy export proceeds at Tk99 and remittance dollars at Tk108. Later, they lowered the remittance dollar price to Tk107 in two phases.

Several treasury department officials of some private banks told The Business Standard that at least five banks including these two banks are collecting dollars at a higher rate than fixed by the authorities. As a result, those who are complying with the prescribed rate are losing remittances.

Seeking anonymity, an official of the treasury department of a private bank said, "Several banks are paying higher rates for collecting remittances. We also have some proof of that. If it continues, it will be hard for us to maintain the market."

On 1 December, a circular signed by Selim RF Hussain, chairman of the ABB and Mohammad Firoz Hossain, chairman of Bafeda, said that any deviation to the decision by any bank will be viewed and dealt with strictly by the regulator (Bangladesh Bank).

However, the Bangladesh Bank has also acknowledged the issue of several banks' collecting remittances at a higher price. On 4 December, the issue was discussed at the bankers meeting held in the central bank.

Md Mezbaul Haque, executive director and spokesperson of the central bank, said after the meeting, "More than 90% of the banks are following the fixed dollar rate of remittances from Bafeda. A few banks are giving slightly higher rates for different currencies."