Dollar price plummets by Tk2.9 in a week as demand wanes
Banks offer rates as low as Tk120 for remittance dollars on Thursday

The US dollar has experienced a significant depreciation against the taka over the past one week, with its price falling by approximately Tk2.90.
This notable decline is attributed to a decrease in dollar demand within the market, coupled with robust inflows from remittances and exports.
Banks reported offering a rate of Tk120 for remittance dollars on Thursday, although some claimed to have purchased at Tk120.50. However, foreign exchange houses selling remittance dollars noted that while rates were 20-50 paisa higher at the start of Thursday, no bank was willing to offer more than Tk120 by the day's end. Just at the beginning of last week, banks were offering Tk122.80-122.90 for remittance dollars.
Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, told TBS that banks are currently experiencing significantly reduced demand for dollars. "As the rate continues to fall, many banks are reluctant to hold onto dollars and are attempting to sell them off," he explained.
Mahbubur largely attributed the increased dollar availability in the market to a slowdown in import Letter of Credit (LC) openings and strong inflows from remittances and exports.
The country head of a foreign exchange house expressed frustration at the difficulty in selling dollars to banks. "There was a time when banks would call us requesting dollars, and we could not meet the demand. However, over the past week, we've seen the opposite scenario in the market."
He added, "I personally offered to sell $10 million to a bank, and due to our relationship, the bank showed interest in buying a maximum of $1 million. If this trend continues, the dollar's price will fall even further."
A deputy managing director of a leading private bank shared a similar experience, telling TBS that an offer to purchase $5 million in remittance dollars at Tk120.80 came from an exchange house on Thursday afternoon. However, he declined the offer, anticipating a further drop in remittance dollar prices this week. "If we buy dollars at a higher rate now, we will have to sell them at a loss later," he reasoned.
The dollar market had been volatile since early December, when the dollar-taka exchange rate twice hit a historic high of Tk128 within two working days. Central Bank intervention subsequently brought the dollar price down.
At that time, Bangladesh Bank Governor Ahsan H Mansur said that the dollar market had become unstable due to the "immature decisions of a handful of banks." He also pointed out that aggregator foreign exchange houses were driving up dollar prices, asserting that such actions "would not be tolerated."
Subsequently, in mid-May, the Bangladesh Bank officially shifted to a market-based exchange rate regime, allowing market participants to trade dollars at freely negotiated rates, in line with conditions set by the International Monetary Fund (IMF). Since then, the dollar's price has generally been on a downward trend.
Will dollar price fall further?
For the past few years, the dollar market in Bangladesh has seen demand consistently outstrip supply. A major reason for this was the significant backlog of government import payments. This created constant dollar demand from state-owned banks, which needed to clear these payments. Similarly, many private import LC payments were also overdue. As the dollar's price continued to rise, businesses were eager to settle these payments quickly, which in turn increased pressure on the market.
According to a deputy managing director of a leading private bank, the reduced demand from state-owned banks has been a significant factor in the dollar's recent fall. He said, "Soon after Governor Mansur took charge, he prioritised clearing the government's overdue import payments. However, instead of providing dollars from reserves, the governor pressured state-owned banks to collect dollars from the market."
He continued, "Consequently, these banks purchased substantial amounts of remittance dollars, sometimes up to $1 billion in a single month. This allowed them to clear almost all of their overdue payments, resulting in no current dollar demand from these banks."
Another bank's managing director noted, "Investment is almost non-existent at the moment. Without investment, imports of capital machinery, raw materials, and many other items don't happen. Currently, a large portion of imports consists of essential consumer goods, which typically remain at a static level."
He added, "We don't foresee any rapid increase in dollar demand. On the other hand, our remittance inflow is very strong, and export proceeds are also coming in well. All in all, the dollar supply is excellent. As a result, the dollar price could fall further in the coming days."
The banker, however, cautioned that if the central bank starts buying dollars from the market, it could affect the dollar's price, potentially causing it to rise slightly.