Dollar being sold at highest price

Syed Nasir Hossain: The dollar crisis is still evident in commercial banks. This crisis has been going on for almost a year and a half. Various measures to increase the supply of dollars are not working. Meanwhile, banks are struggling to meet outstanding loans and import expenses. As supply falls short of demand, the dollar may rise further.
In this context, the upper limit has been set to curb the rise in dollar prices. Now almost all banks are selling dollars at the maximum limit. Even most of the government banks are selling at maximum price. Some banks are selling at higher prices than the maximum limit. Meanwhile, the central bank is increasing the selling price of dollars from the reserve in coordination with the market.
According to sources, since December last year, the central bank has taken steps to control the dollar market through Bangladesh Foreign Exchange Dealers Association (BAFEDA), an organization of chief executives of commercial banks dealing in foreign currency, and Association of Bankers of Bangladesh (ABB), an organization of top executives of commercial banks, without directly controlling the dollar market. Through them, the price of dollar is being increased from 50 paisa to 1 taka every month. As part of this, the dollar was last raised on August 1. At that time, the dollar price of remittance was increased by 50 paisa to Tk 108 from 50 paisa to Tk 109. The dollar price of export earnings was increased by one taka from Tk 107.50 to Tk 108.50. At the same time, the price of the dollar in the interbank market was increased to a maximum of Tk 109.50. Banks have been asked to keep a maximum price of Tk 109 per dollar on imports orally. Within three days of the new rate coming into effect from August 1, i.e. Thursday, August 3, the dollar price reached its maximum in most banks. Earlier, the dollar was sold below the ceiling. Interbank would also have rates lower than the ceiling. Now interbank too has reached the maximum limit on the first day itself. Earlier, there were two rates in this market, maximum and minimum, now there is no minimum rate. All are top rated.
It can be seen from the Bafeda report sent to the central bank, that all the banks have taken the maximum rate of export dollar to Tk 108.50. In this context, bankers said, exporters do not want to sell if the dollar price is low in this sector. As a result, they negotiate with other banks and sell dollars at a higher price. To stop this trend, all banks are buying export dollars at Tk 108.50.
If the banks have excess dollars to meet their needs, there is a rule to sell them interbank. The dollar price in this sector will be Tk 109.50 maximum. According to the policy, banks can sell in this sector at one taka higher than the average purchase price of a dollar. But it will not exceed Tk 109.50 in any order. Banks are buying dollars at a higher price, so the average price is falling. As a result, while making a profit of one taka, its price is stuck at Tk109.50. No bank is able to make a single profit in this. Rather, it is selling at a much lower profit.
There is a verbal instruction to keep the dollar price of imports at a maximum of Tk 109.50. However, according to the policy, a maximum profit of one taka can be made over the average purchase price of a dollar. If the bank buys at the highest price i.e. remittance Tk 109 and export dollar Tk 108.50 then its average price is Tk 108.75. But export dollars are bought more and remittance dollars are bought less. The average cost per dollar is Tk 109.25. It is not possible to make a profit on that dollar. It has to be sold at a profit of only 25 paise. It does not include the bank’s operating expenses. Despite that, most of the banks are selling the dollar at Tk 109. Some banks are selling at a higher price than this.
Central banks sell dollars from reserves at interbank average rates. At present, the maximum price of Tk 109.50 is being sold in interbank. As a result, the central bank also increased its price to Tk 109.50.
Banks are currently selling dollars interbank very little. They are selling in advance for different periods. The forward dollar is selling at Tk 111 for three months, Tk 112 for six months and Tk 113 for one year.
The price of the euro, pound and other currencies also increased in coordination with the increase in the dollar. Now Euro is selling at Tk 123 to Tk 127. A pound is being sold at Tk 142 to Tk 148.
The dollar price of remittance has been fixed at a maximum of Tk 109. Some big banks are buying remittances at a lower price than this. Other banks are buying at Tk 109. Some weak banks are buying dollars even at Tk 112 to Tk 113 to meet the dollar crisis. The dollar is being sold at a higher price in the hundi.
The average dollar price of imports is Tk 109.25 more. Out of 57 banks, 17 banks are selling dollars at a maximum price of Tk 109.50. These include the public sector leading, Bangladesh Agriculture, Basic Bank. Private Sector Citizen, First Security Islami, Global Islami, IFIC, Islami, Meghna, Madhumati, NRB, NRB Commercial, Padma, Pubali, Shahjalal, Social Islami, Union Bank.
Several banks are selling dollars at more than Tk 109. Among them, public sector Janata Bank is selling at Tk 109.43, Sonali Bank at Tk 109.42, Bangladesh Development Bank is selling at Tk 109.42.
Private Sector Al-Arafah Islami Bank 109.41, Bank Asia Tk 109.26, Bengal Commercial Tk 109.45, Jamuna Bank Tk 109.45, Standard Bank Tk 109.45, Dhaka Bank Tk 109.11, Dutch-Bangla Bank is selling Tk 109.15. Besides, Eastern Bank, ICB Islamic, Midland Bank, City, Premier, Trust, South Bangla Agricultural and Commerce, Southeast, Standard and United Commercial Bank are selling dollars at a price of more than Tk 109.
AB, Bangladesh Commerce, Bank Al-Falah, City Bank NA, Commercial Bank of Ceylon, Community, Exim, Habib Bank, Mercantile, Standard Chartered, State Bank of India and Uttara Bank are selling dollars at a price close to Tk 109. Cash dollar in most banks is Tk 110. Tk 111 in some banks as well. Only Union Bank is selling Tk 112.50.