Anarchy prevails in exchange rate market, says a top businessman

Amid the rising inflation, edible oil refiners want an upward adjustment in prices as the taka continues to fall against the US dollar, pushing up their costs of imports.

The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers’ Association submitted a proposal to the Bangladesh Trade and Tariff Commission (BTTC) demanding a hike in soybean oil price by Tk 20 per litre.

As per the proposal, the price of loose soybean oil a litre was recommended at Tk 180, a bottle of one litre at Tk 205 and a bottle of five-litre oil at Tk 960.

“What else can we do? We are buying dollars at Tk112 to settle import bills, but the edible oil prices are fixed at Tk95 a dollar,” said Mostafa Kamal, chairman of Meghna Group of Industries (MGI), one of the largest conglomerates and commodity importers in the country.

He said they have to pay an additional Tk 17,000 per $1,000 than the exchange rate the government set for LC payments.

“Anarchy prevails in the exchange rate market, which needs to handle efficiently to avert price increase of essentials,” Kamal told Business Insider Bangladesh over the phone on Sunday.

MGI is feeling the heat of currency depreciation more than many as it is a major player in the commodity market in Bangladesh. The group is one of the top importers of sugar, edible and palm oil, wheat and many raw materials for manufacturing products locally.

But the continuous fall of the Taka against the greenback has pushed up MGI’s costs of imports. For example, the interbank exchange rate was Tk 86.50 for a dollar in the middle of April and now it has reached nearly Tk 95.

This dollar is stronger when it comes to LC settlements. Banks are charging their clients as high as Tk 112 for a dollar, higher by Tk 17 than the interbank rate.