Home Bangladesh Is dollar kept in box?
Bangladesh - Bank & Finance - December 2, 2023

Is dollar kept in box?

Syed Nasir Hossain: There is no relief in the dollar market. Banks are still unable to open required LCs due to the dollar crisis. Dollars on demand are nowhere to be found in banks or in the open market at prices fixed by the central bank. There is a clear crisis going on everywhere. The question is – where did the dollar go?
When the anti-casino campaign was launched in the country a couple of years ago, cash was found in chests and under pillows. If so, due to the increase in the price of the dollar and instability in the dollar market, the dollar, like the money, was locked up at home. Economists and analysts say that it is difficult to say whether the dollar has gone to the ark or not, but it is certain that something unusual has happened or is happening in the dollar market.
In this regard, the former governor of Bangladesh Bank Saleh Uddin Ahmed told, “The instability that has been seen in the dollar market in the country for the past one and a half to two years has never been seen in the past. There are many reasons behind the market turmoil. It will take a long time to say one by one, besides, I have been saying these things for a long time. But I can say one thing, behind the instability in the dollar market, there is so much crisis with the dollar in the country because of some wrong policies of the central bank and not taking necessary steps on time.
The dollar crisis in the market is not decreasing but increasing – if so, where did the dollar go? Dr.Saleh Uddin Ahmed in response to this question said, “Many people are saying that the dollar has been kept in chests from house to house like money.” As seen during the anti-casino campaign. I can’t say whether that actually happened or not, but it can be said that something unusual has happened or is happening in the dollar market. If not, despite taking several steps, the crisis is not decreasing, instead it is increasing. I think there is no alternative to increasing the supply of dollars to overcome the dollar crisis. For this, a suitable investment environment has to be created.
Meanwhile, the banks reduced the price of the dollar by 75 paisa in two rounds during the crisis. Even so, the situation is not improving. Apart from that, even if the banks reduce the official price of the dollar, the actual situation is different. Now the dollar crisis has intensified, prices have also increased. The cost per dollar of expatriate income now exceeds Tk 123. Although in the declaration, the dollar price of expatriate income is Tk 109.75.
In the past few days, the open market has seen a demand for buying large amounts of dollars, which is much more than the normal demand for people’s personal foreign travel. In terms of this, the question has arisen, where are so many dollars going, are the dollars being smuggled? Although there is no recent evidence of smuggling, some people are believed to be buying dollars for investment purposes.
As a result of reducing the price of the dollar by 75 paisa in two steps, the price of the dollar has become Tk 109.75 due to the purchase of expatriates and export income. And in case of import, the price is Tk 110.25. However, dollar trading is low at fixed prices. Even on Thursday, banks bought expatriate income at a price of more than Tk 123. Bangladesh Foreign Exchange Dealers Association (BAFEDA) and Association of Bankers Bangladesh (ABB) took this decision in a meeting last Tuesday evening. The new price of the dollar will be effective from today(Sunday). Earlier the official price was 25 paisa higher. Generally, people buy dollars from open market or banks for expenses related to travel, medical, training and education abroad. But due to the crisis, dollars are no longer available to meet these needs.
Meanwhile, there are allegations that many people are buying dollars systematically from the market. Not going abroad, but a lot of people are buying and saving dollars hoping for a quick profit. Analysts believe that this is also part of a plan. Apart from this, even though there are dollars in some banks, there are complaints of negligence in various works including LC. Attempts are being made to create a kind of artificial crisis by creating confusion in opening of LCs and various problems in exports. Apart from this, during the corona period and after that, the exports did not bring much money. Various big companies, especially those involved in garments, have imported raw materials at higher prices through over invoicing, through which several dollars have been smuggled abroad. Many people did not bring the money from the export income to the country. Due to these reasons, analysts believe that there is a dollar crisis in the country.
Executive director of the Economist and Policy Research Institute on the ongoing crisis of the dollar Ahsan H. Mansoor said, “We have been warning about the dollar for a long time. We have said in various meetings and seminars that the currency has been overvalued for a long time, the value of the dollar has not been increased. If the price had been adjusted step by step, the dollar market would not have had such a crisis today. The dollar is suffering so much because of this one wrong decision.
He also said that usually during the crisis some people tend to buy something more. This can happen in the dollar open market. Some people are buying dollars on a whim. They think the price will increase. Apart from that, the related organizations can check whether dollars are being smuggled or not. There is a worldwide trend of money laundering by understating the value of imports and exports. The danger of smuggling cannot be ruled out in the unusual situation of the dollar rate in the open market in Bangladesh. Now the government and the central bank have to think deeply about the issues and do strict monitoring. However, with the upcoming national elections, those who needed to think about these things are not thinking about them now or do not have time to think about them.

Check Also

Don’t listen to rumors about prices hike: PM

Staff Correspondent : Prime Minister Sheikh Hasina has urged the people of the country not…