Helpless businessmen due to dollar volatility November 12, 2023


Monday, November 13, 2023 at 00:00 hrs

Urge the government and Bangladesh Bank to step up efforts to overcome the crisis – stop harassing expatriates to send dollars, reduce unnecessary imports and demand for dollars and ensure timely foreign aid

Ruhul Amin Russell

The open market is now trading at 125 to 127 taka per US dollar. The high value of the dollar and the crisis spread instability in the economy. Traders have become helpless. No one knows when the dollar will stabilize. The stakeholders have urged the government and Bangladesh Bank to increase their efforts to increase the supply of dollars in the market to overcome such a crisis. In this context, the former caretaker government’s financial adviser. AB Mirza Azizul Islam told Bangladesh Daily that the government and Bangladesh Bank should try to improve the situation. Remittance or expatriate income should be increased. Unnecessary imports should be reduced. It must be ensured that the foreign aid for development projects is received on time. Besides increasing the supply of dollar in the market, its demand should be reduced.

Federation of Bangladesh Chamber of Commerce and Industry- FBCCI President Md. Mahbubul Alam told Bangladesh Pratidin that the businessmen of the country have become helpless due to the dollar crisis. Many businessmen are in danger while opening letter of credit or LC. Each bank is buying and selling dollars at different rates. As a result, the cost of importing goods is increasing. The production cost of the industry is increasing. Dollar supply should be increased to overcome this crisis. Awareness should be raised among expatriates. Expatriates are being harassed while sending more dollars through banking channels. Bangladesh embassies abroad should play an active role in eliminating this harassment.

Association of Bankers Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers Association (BAFEDA), the organization of private bank MDs, has a dollar rate of Tk 111 in banks. It is being sold in the open market at 126 taka 50 paisa to 127 taka. Industry stakeholders say that the increased demand for dollars in the economy after the corona epidemic, the Russia-Ukraine war has increased the dollar rate. The spread between the dollar exchange rate in the bank and the open market has been narrow for the past few months. The price gap between banks and the open market has widened again due to lower dollar reserves in banks, price fixing and the increase in the number of students going abroad as well as increased transactions through hundi.

Reportedly, most commercial banks are not selling dollars to travelers. As a result, they are forced to go to the open market to buy dollars. Several money changers in Motijheel of the capital told Bangladesh Pratidin yesterday that they are selling dollars from 126 taka 50 paisa to 127 taka.

Talking to the money changers revealed that people going abroad for medical treatment or travelers are struggling to buy dollars. The prices listed by the money changers for the foreign currency are 113 taka 30 paisa for sale and 111 taka 80 paisa for purchase. However, this rate is not very acceptable. The central bank has taken various initiatives to control the price during the dollar crisis. The rate is fixed through ABB and Buffeta, the association of bank chief executives. Currently, ABB and Buffeta have fixed rates of 110 taka 50 paisa. And the selling price is fixed at 111 taka. But to meet the demand, several banks are buying dollars from foreign exchange houses at the rate of 122 to 124 taka. And the dollar price for import is 125 rupees.

Analysts say bank-fixed dollar prices have helped create increased demand in the open market. They think that when expatriate Bangladeshis get Tk 127 per dollar in the open market, they will refrain from sending remittances through banks. According to BMET information, 9 lakh 89 thousand 685 workers went to different countries of the world from January to September this year. In the same period of 2022, the number of workers who went abroad was 8 lakh 74 thousand 739 people. This is a record in terms of job creation abroad. Since 2022, despite the record of sending workers abroad, the income of expatriates is decreasing. Again, the country’s foreign exchange reserves are also weakening. According to the Central Bank statistics, in the last 41 months, the lowest remittance of 134 million dollars has arrived in the country in September. Earlier, the lowest remittance of $1.09 billion came in April 2020.

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The article is in Bengali

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