Staff Reporter :
The price of US dollar is going beyond under control as it jumped to Tk 100-102 in the city’s curb markets on Tuesday.
The prices are skyrocketing due to acute dollar shortage in the country, the market insiders said.
They said the dollar price was Tk 96-98 on Monday and it is increasing day by day. Mohammad Mamdudur Rashid, Managing Director and CEO of NCC Bank, said foreign exchange market has become volatile as payment obligation is increasing.
“Bangladesh is under tremendous pressure to weaken the taka to protect its depleting foreign currency reserves amid soaring imports against moderate exports and falling remittances,” Rashid said while speaking at a press conference at his office on Tuesday. Owner of Pioneer Exchange House, located in Motijhel area, told The New Nation on Tuesday, “Today’s dollar rate is Tk 102. It may increase further ahead of Hajj season due to dollar shortage.”
Another exchange house owner said they selling dollar at Tk 101.50 per dollar as there is huge demand in the open market. Meanwhile, despite the devaluation, many banks on Tuesday charged importers more than Tk 95 under the BC (bills for collection) selling arrangement due to the scarcity of dollars.
Although the central bank fixed the BC selling rate at Tk 87.60 per dollar, banks still had to ignore the BB instruction.
A BB official, wishing not to be named, said that the central bank might weaken the local currency further in the quickest possible time as the latest depreciation might not be able to stop the escalation of imports. The exchange rate came under pressure against the dollar since the final quarter of 2021 when imports bounced back due to the pent-up demand and price increases in the global market following the improvement in the Covid-19 pandemic.
The monthly import has shot past $7 billion, dealing a major blow to the reserves since exports and remittance flow has not kept pace. Between July and March, import payments escalated to $61.52 billion, up 44 per cent year-on-year while exports grew 33 per cent to $36.61 billion. This inflicted the highest-ever trade deficit of $24.90 billion on Bangladesh during the period.
The trade deficit reduced the reserves to $41.92 billion last week in contrast to $46.15 billion on December 31. The reserves had surpassed $48 billion in August. Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), thinks the depreciation will not bring about many negative impacts because banks are already charging importers Tk 95 per US dollar.
He laid emphasis on market governance to tackle manipulations that prevail in the supply chain of foods and tackle inflationary pressures. “Imports duties could also be adjusted as the government has done in the case of rice,” he said.
