Reserves drop to $39.04b as dollar sales continue  

The country's foreign exchange reserves dropped to $39.04 billion on Tuesday after the Bangladesh Bank sold $153 million to banks for import bill payments.

In the current fiscal year starting in July, the central bank has so far sold around $2.44 billion. It had sold a record $7.62 billion from reserves in the last fiscal year.

According to the central bank, it sold more than $150 million for the second consecutive day. On Monday, $164 million was sold from the reserves. 

At the end of July, the reserves stood at $39.60 billion. If the dollar sale continues in this pace, the reserves may fall below $39 billion within a short period, said the people concerned.

On Tuesday evening, the Association of Bankers Bangladesh (ABB) held a meeting to decide on the dollar market. Managing directors of different banks including ABB Chairman and Chief Executive Officer of Brac Bank Selim RF Hussain were present at the meeting. 

The bankers discussed steps to restore stability in the dollar market and activate the interbank exchange platform.

A senior official of the central bank told The Business Standard that all banks have become cautious after the Bangladesh Bank took punitive measures against six of the lenders for making excessive profits.  

Pointing out that the pressure on the market is decreasing due to the sale of dollars from reserves, he said the central bank has been providing dollar support in government's LC settlements mainly for fuel and fertiliser imports. 

State-owned banks have expressed relief at increasing dollar support from the central bank. According to them, this results in less dependence on the market for dollars. 

Spokesperson and Executive Director of the central bank Md Serajul Islam said, "Stabilising the dollar market is not our main target. The market will move at its own pace."

"We have to consider the purchase of some sectors of the government including energy. If the private or state-owned banks do not have dollars for LC settlements, dollars are sold from the central bank. We continue to honour it," he added.
 
Dollar's import LC settlement rate drops 

On Tuesday, state-owned banks sold dollars in import LC settlements at a maximum Tk108. The highest rate of Tk109 was charged on Monday. But private banks have been charging slightly lower for dollars in LC settlements for the last few days.

A treasury department official at a private bank told TBS, "We are buying dollars at an average Tk105. So in LC settlements, we have charged up to Tk106. This rate has been going on for the last three days." 

Besides, exchange houses slightly lowered the dollar on Tuesday. Remittance dollars were collected from the houses at a maximum of Tk110. However, there is still a dollar crisis in the market.

Although there is a shortage of dollars, the price of the dollar may decrease slightly in the next few days, said treasury department heads of at least two banks. 

They said that private banks have already reduced the dollar price. Although the state-owned banks are still charging high for dollar, they are expecting that they will be able to bring it down in a few days.

The treasury department head of a state-owned bank said, "In LC settlements, we fix the rate depending on the type of LCs. In case of government LCs, we are charging Tk95.05 fixed by the central bank. This is the rate we charge for small amount private LC settlements. However, in the case of private large LCs, the dollar was sold at the highest rate of Tk108 on Tuesday."

This banker commented that because of collecting remittance dollars from exchange houses, the price is higher.
 
Dollar soars to Tk112 in the open market

Despite a slight drop in banks, dollar rates have gone up in the open market. On Tuesday, money changers sold the greenback at Tk112, up from Tk111 on the previous day. The cash dollar was sold for Tk109 in on Thursday.

Earlier, the central bank suspended the operations of five money changers for alleged irregularities. 

In addition, the Bangladesh Bank warned 42 money changers on various charges and the Bangladesh Financial Intelligence Unit, which works to prevent money laundering, has called for the bank account information of 28 money changers.