12 banks taken Tk 65,000 cr loan against $580m security

Zarif Mahmud : Commercial banks have started borrowing money by depositing dollars in the central bank through currency swaps to meet the liquidity crisis. A total of 12 banks have deposited $58.80 billion in the central bank since the beginning of the currency swap or taka-dollar exchange. On the contrary, about Tk 6,500 thousand crores have been borrowed. As a result, Bangladesh Bank’s foreign exchange reserves have increased slightly. This information is known from Bangladesh Bank sources.
According to Central Bank sources, these taka-dollar swaps have been done for a period of 30 days. After 30 days, the banks will take the money with the dollar. No bank has yet taken dollars by depositing money with the central bank. Basically, those who are receiving more remittances are swapping with the central bank. Banks are now officially buying expatriate and export earnings at the rate of Tk 110. Banks exchanged dollars with Bangladesh Bank at this price. Bangladesh Bank has given equivalent amount of dollars to commercial banks.
When asked, Bangladesh Bank Executive Director and Spokesperson Majbaul Haque told that several banks have taken money from the central bank by depositing dollars. Basically, those who are getting more remittances are doing the swap. Banks which have liquidity crisis are also doing swaps.
As the banks borrow money by depositing dollars, the reserve of Bangladesh Bank has increased slightly. According to the IMF’s BPM 6 calculation on February 14, the foreign exchange reserves were $19.93 billion. On February 20, it increased to $20.19 billion. By the end of the day on Monday, the reserves increased to $20.51 billion. Bangladesh Bank’s own reserve at the end of that day was $25.52 billion.

Bangladesh Bank launched Taka-Dollar swap system on February 15. As a result of this new arrangement, commercial banks are able to exchange dollars and rupees with Bangladesh Bank. In this method, the bank can take opposite currency for 7 to maximum 90 days by depositing rupees or dollars. The currency which is taken at the end of the stipulated period, the currency has to be returned. A party will receive interest for the period fixed for the currency swap. Conventional banks earn interest on the difference between the repo policy rate and the dollar benchmark rate, the Secured Overnight Financing Rate (SOFR).
Bank sector officials say that this system of taka-dollar exchange is profitable for both parties. Because the banks will get instant money against surplus dollars. Again, by returning the money after the specified time, the commercial banks will get an equivalent amount of dollars from Bangladesh Bank. A minimum of $5 million or its equivalent is being exchanged under this system.
An official of the central bank said that the country’s commercial banks have been suffering from dollar and cash crisis for a long time. In this case, it is seen that there is a shortage of money even though some banks have more dollar holdings. Others have cash but are short of dollars. In such a case the one who has the currency can take the opposite currency for a temporary period. Liquidity crunch in the market can be eased due to relatively low interest rates and easy swap facilities.
Dollar-crisis is going on in the country for the last two years. As a result, the reserve has been reduced to almost half. To deal with the dollar-crisis, various measures including import control were taken. Although the demand has decreased somewhat, the dollar crisis has not yet completely ended. As a result, the importers still have to pay up to Tk 123 for every dollar to meet the import liability. Again, some banks are buying expatriate income dollars at higher prices than declared.
In addition to dollars, there is also a shortage of money in various banks. Because banks have to buy dollars with cash. Besides, some banks are facing liquidity crisis due to irregularities and corruption. But some banks have some extra dollars. Now they are depositing those dollars in Bangladesh Bank and taking an equivalent amount of money against it.
It is known that some banks borrowed about Tk 13,360 crores from Bangladesh Bank last Sunday to meet the liquidity crisis. And borrowed about Tk 3,525 crores in interbank loans.