Staff Correspondent: Foreign exchange reserves will start to increase soon. The central bank thinks that the reserves will not decrease after this week. Not only that, several initiatives have been taken by the central bank are believed to help increase reserves this time.
In this context, Bangladesh Bank’s Executive Director and Spokesperson Mejbaul Haque said, “Central Bank has taken several initiatives to increase reserves. Hopefully, it will be beneficial. In addition, more than one billion dollars of foreign loans and budget support will come in this December. As a result, the reserve will not decrease this month.
It is reported that $400 million of budget-assistance will be added to the reserve from the Asian Development Bank this month. Apart from this, the second tranche of the International Monetary Fund (IMF) loan is expected to be approved by the board of the organization on December 12. If approved on that day, the second tranche of $680 million will be added to the reserve the next day.
Interest of more than 7 percent
The central bank has announced interest rates of over 7 percent from now on deposits as Resident Foreign Currency Deposits (RFCDs) as part of its initiative to bring home dollars to banks to boost reserves. Not only that, after traveling abroad, you can get various benefits including remittance of money outside the country, issuance of multiple cards from such an account opened back home.
Recently, Bangladesh Bank has sent an instruction regarding this to the banks.
It should be noted that now many people are buying and holding dollars, so there is an extreme shortage of cash dollars in the market. In this situation, a new initiative has been taken to bring the dollars kept at home to the bank.
The Central Bank says that one can open an RFCD account and deposit up to $10,000 after returning from abroad. Someone may have taken $500 with them when they left. Open an account with $10,000 after your return and do not face any questions. Basically, such initiatives have been taken to bring the dollars in the hands of the people to the bank.
According to the central bank circular, two supplementary cards can be issued against such deposit. Dependents of the bank customer including children or siblings can use the card. Education expenses abroad can be remitted from this account. Again, the medical expenses of wife or husband, children, siblings, parents who are dependent on themselves can also be borne from here.
Remittance beneficiaries can open accounts in foreign currency
Another directive has been given to the beneficiaries of remittances sent by expatriate Bangladeshis to open accounts in foreign currency to bring in high interest dollars to overcome the ongoing crisis. Accounts opened in the name of the beneficiary will earn interest rates of 7 to 9 percent for a tenure of three months to five years, which is higher than in other countries. Those other than expatriate beneficiaries who can open accounts in foreign currency will also get interest at this rate. These instructions are given to bring dollars held outside the country.
BB buying dollars
In addition to various policy support in increasing the remittance flow, Bangladesh Bank is buying the dollars bought at a low price from the banks that are in dollar crisis to increase the reserves.
As part of this initiative, the central bank is in contact with private banks. However, most of the banks are struggling to open LCs as they are in dollar deficit. Additionally, private banks have to incur losses as the central bank withdraws dollars from them.
In this regard, Bangladesh Bank spokesperson Majbaul Haque said, “Commercial banks have extra dollars, we are buying them from them. It is helping to increase our reserves.
Depreciation of dollar
The central bank has forced banks to lower the official price of the dollar amid the crisis. As a result, the purchase price of the dollar has been reduced by 75 paisa this month. The price of the dollar will be Tk 109.75 for buying expatriate and export earnings, and Tk 110.25 for imports. Although in the open market every dollar is sold at the rate of Tk 128.
It is said that the reason for reducing the price of this foreign currency is that there is no shortage of dollars as of now. As our country is import dependent, the government hopes that the price of goods will not increase. Again, the bank money will also cost comparatively less.
Incidentally, according to the data published by the Central Bank, the country’s gross foreign exchange reserves have fallen to $24 billion. Net reserves have also come down to the $19 billion mark. If the net reserves decrease by another 13 billion dollars, it will come down to $18 billion. However, actual reserves are now less than $1,600 million.
Steps to increase remittances
Along with the rate of 2.5 percent, the bank is also offering a cash incentive of 2.5 percent.
In addition to CIP honoring of remittance senders, expansion and simplification of remittance distribution process, investment and housing financing facilities for non-resident Bangladeshis, encouragement of international money transfer operators to set up drawing arrangements with Bangladesh banks under fintech system and waiver of charge fees of banks or exchange houses for sending remittances. Even the condition of filling Form-‘C’ has been relaxed in bringing in remittance income.
Increase in maximum limit for sending remittances through MFS
The maximum limit for sending remittances through Mobile Financial Services (MFS) has been increased to double than before. As a result, a maximum of Tk 2.50 lakh can be sent directly to the beneficiary through the bank.
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