Decisions on dollar rates change amid lack of coordination

There has been an obvious lack of coordination over the appreciation of the US dollar, resulting in frequent changes in the exchange rate. Decisions have been made and then revoked or cancelled too.

In a latest development, a meeting was held between the Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealer's Association (BAFEDA) at the office of Sonali Bank on Sunday night.

Sources said a decision taken an ABB- BAFEDA meeting on 31 October that expatriates with higher income will receive Tk 107 per US dollar instead of the previously fixed Tk 99.50 a dollar once they send remittance through banking channels.

On top of that, banks will charge no fees to collect remittance and interbank dollar rate was set at Tk 107.50. Bangladesh Bank deputy governors Ahmed Jamal and Kazi Saidur Rahman were present at the meeting on behalf of the central bank.

Leaders of ABB and BAFEDA sat on Sunday night to implement the decisions taken on 31 October.

At the meeting, BAFEDA chairman and Sonali Bank managing director Md Afzal Karim said Bangladesh Bank has instructed to suspend the decision on dollar price for expatriate professionals with higher income and interbank dollar rate.

The announcement left the bankers attending the meeting surprised. Top officials of private banks and managing director of state-banks hold ABB and BAFEDA leadership respectively.

The meeting then discussed that the central bank has instructed banks not to charge fee on remittance.

Bankers attending the meeting said they might waive the remittance processing fee on the amount that they receive through their own money exchange houses. However, more than 90 per cent of remittances come through multinational money exchange houses. So, waiving the processing fee will not be possible on remitting the entire amount right now.

At the meeting, a decision was taken not to collect fees on all remittance and bankers were advised to start talks with multinational money exchange houses on this matter.

The meeting also decided that money exchange houses owned by local banks would collect remittance on holidays so that expatriates face no hassle to remit their income. Besides, exchange rate of the US dollar for export proceeds was raised to Tk 100 from Tk 99.50.

BAFEDA chairman would talk to the central bank officials on Monday and seek decision on various issues. He then will sit with bankers.

According to sources, there have been disagreements between two deputy governors of the central bank over various decisions related to appreciation of US dollars. One deputy governor an gives opinion and the other disagrees later, resulting in frequent changes in dollar prices. Thus, Bangladesh Bank could not reach any decision to ease the dollar crisis.

So, dollar is being sold regularly from foreign exchange reserves, which has dropped to $35 billion now. Import of commodities becomes difficult due to the dollar crisis, with many banks not opening letter of credit (LC) for food imports.

Speaking to newspersons after the meeting, BAFEDA chairman Afzal Karim said money exchange houses owned by local banks will remain open on weekends and holidays to make remittance sending easier, with no processing fees being charged.

Besides, exchange rate of the US dollar for export proceeds has been increased by Tk 0.50 to Tk 100, he added.