Dollar price set at Tk 123.35 as forward rate under new rules
Bangladesh Bank has introduced new rules to determine the future price (forward rate) of the dollar, with a fixed maximum rate set. Under these regulations, after one year, the bank can charge a maximum of 5 per cent above the Six Months Moving Average Rate of Treasury Bill (SMART) rate.
The central bank implemented this rule through a notification issued on Sunday. The method by which interest rates are now determined is known as SMART, or Six Months Moving Average Rate of Treasury Bill. Bangladesh Bank discloses this rate at the beginning of every month. The SMART rate was 7.10 per cent in July, increased to 7.14 per cent in August, and remained unchanged in September.
If one books dollars for the future now, they will have to pay Tk 123.35 per dollar after one year. If the pricing is done on a monthly basis, the cost will decrease each month. Currently, the dollar price for imports stands at Tk 110.
Bangladesh Bank introduced the new rule yesterday, taking action against 10 private sector banks for selling dollars at high prices to importers. However, some of these banks told Prothom Alo that they set higher prices for importers when collecting forward rates.
According to information from various sources, the 10 banks facing penalties are Mercantile Bank, Premier Bank, BRAC Bank, Madhumati Bank, Midland Bank, Exim Bank, Social Islami Bank, Al-Arafah Islami Bank, Shahjalal Islami Bank, and Trust Bank. Sources suggest that some more banks may also face penalties.
Future prices can be established for both buying and selling dollars. An importer can purchase dollars now and import goods within a year, necessitating an additional commission to the bank based on the prevailing dollar prices.
Even if the price falls during that period, the importer must pay the agreed current price. However, if the price increases again, they will reap the benefits, meaning they won't have to pay extra. Meanwhile, exporters can also sell dollars at specific times. In this scenario, if the price falls, the exporter may incur losses.
The Bangladesh Foreign Exchange Dealers Association (BFEDA) and the Association of Bankers, Bangladesh (ABB), following Bangladesh Bank's guidance, have been periodically setting the dollar price based on supply and demand dynamics. The official price of the dollar is increasing every month.
As per the recent decision, the price for purchasing a dollar for export income of goods or services sector and a dollar for remittance has been set at Tk 109.50 starting this month. Previously, banks officially paid Tk 109 for remittance and Tk 108.50 to exporters for every dollar.
On the other hand, banks are presently selling dollars to importers at Tk 110. Previously, banks used to sell at Tk 109.50 per dollar to importers to fulfill their import liabilities. However, there are complaints that, in reality, the dollar is hardly being bought and sold at this price.
All banks sell dollars at their declared prices. If the transaction involves more than USD 10,000, the price will be determined based on the bank-customer relationship, deviating from the scheduled price.