The people who would go abroad must need the US dollar or currencies of the respected countries. Generally they collect the currencies from two sources - commercial banks and government-approved money changers. The money changing organisations have been charging more than the exchange rate the banks fixed due to the current dollar crunch.
The Bangladesh Bank has informally told the banks to collect remittances even if it requires a higher rate to get over the crisis the country has been going through. As a result the banks have increased the dollar rate for remittance. Some of the banks have been buying the US dollar at a rate of Tk 115-116 though the rate fixed by the authorities is Tk 110.50.
Generally, Association of Bankers, Bangladesh (ABB), an apex body of bankers, and Bangladesh Foreign Exchange Dealers Association (BAFEDA), an organisation of the banks involved with foreign currency exchanges, fix the dollar price at the advice of the central bank.
The money changers generally buy the US dollars from the people who return from abroad, expatriates and tourists. In some cases they buy the dollar from the banks and sell those at a higher price. But recently, the out-bound passengers had to buy dollars with Tk 10 more than the fixed rate. At the same time, there were allegations of money laundering against some of the money exchangers.
In this context, the situation has aggravated as the police conducted raids at a number of money exchanging houses at the behest of the government. The money exchangers are not selling dollars openly now. The passengers, who want to go abroad, have been facing hurdles at different places.
Even if we exclude the issue of travelling, many go abroad for medical treatment and higher education purposes. The steps the government has taken to dispel sufferings of people have actually aggravated the situation.
The money exchangers said they can’t sell the dollar at the rate the Bangladesh Bank has fixed after buying them at a higher rate. Money Changers Association of Bangladesh president AKM Ismail Haque told Prothom Alo many have started selling dollars directly outside of the money changers. As a result, with days floating businesspersons are taking control of the trade.
There could be a solution of the problem if the market is allowed to set the dollar price, think the experts. The government policymakers also have acknowledged that in principle. But they couldn’t make a decision about this yet. Some of them talked about withdrawing the control after the parliamentary elections.
Bangladesh Bank should resolve the crisis through discussion quickly. Of course the government would take action against money exchangers that are involved with hundi business or any other illegal activities. But the way police raids have been conducted against the money exchangers is unwarranted. The people who want to go abroad will face more crises if the money exchangers shut down their business.
The money exchangers must keep open especially when the banks are not able to supply sufficient amounts of dollars even after announcing incentives. At the same time, the out-bound passengers have to be encouraged to use credit cards. This will help decrease the demand for dollars significantly.