In a bid to keep inflation in check, Bangladesh Bank, the country’s apex financial regulator, is still selling the dollars at Tk 97 each. But the banks are charging Tk 105 for each dollar for import payments. Besides, they are providing Tk 107 against each dollar for remittance encashment and Tk 107 for export income.
It was learnt that some USD 72 million were sold from the reserves on Thursday. More than USD 460 million were sold out in four days of the current month – USD 130 million on 7 November, USD 109 million on 10 November, USD 120 million on 14 November, and USD 110 million on 15 November.
Bangladesh received a record amount of inward remittances amid the Covid-19 pandemic. The central bank then bought around USD 8 billion from the market in fiscal year 2020-21, to keep the dollar market and price stable. The forex reserves, in consequence, rose to USD 48 billion in August last year.
The central bank's supervision on LC opening continues. There is no barrier in LCs and the banks are opening it subject to dollar supply
The Bangladesh Bank later sold out some USD 7.62 billion in total in the fiscal. The selling trend continued in the current fiscal as a total of USD 5.94 billion have so far been offloaded from the forex reserve in the last four months.
In total, the central bank offloaded USD 13 billion from the forex reserve to the market in the last 15 months.
The Bangladesh Bank used to provide dollars to private importers, but it now refrains from doing so, leaving no shelter for the commercial banks. As a result, the banks reduced opening letters of credit (LC) for importing commodities. All importers, from small traders to giant ones, are facing problems in opening LCs.
The opening of LCs went down remarkably at the banks due to the dollar-crisis and restrictions on imports.
LCs involving imports of USD 4.74 billion were opened in October, which is sharply down by 38 per cent from the previous year’s same month.
The previous month – September – registered new LCs worth USD 8 billion. It denotes that the amount of LCs almost halved in the context of month-to-month comparison.
LCs worth USD 1.8 billion have been opened in the first 16 days of the current month, which is 63 per cent less than the previous year’s same period.
The amount of LCs in the fiscal year 2022-23 has been totaled at USD 19.57 billion until 16 November. It is less by 30 per cent compared to the previous year’s corresponding period. However, the amount of LC settlement has increased by 5 per cent.
The central bank spokesperson, Abul Kalam Azad, said, “The Bangladesh Bank is providing dollars to pay government import bills. At the same time, the central bank's supervision on LC opening continues. There is no barrier in LC opening. The banks are opening LCs subject to dollar supply.”