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03 October 2022

Business Insider Bangladesh

BB reminds banks on Tk 1 margin on selling and buying dollar

BI Report || BusinessInsider

Published: 12:52, 15 August 2022   Update: 15:02, 15 August 2022
BB reminds banks on Tk 1 margin on selling and buying dollar

Photo: Representational

Bangladesh Bank instructed the banks to keep the spread or gap between selling and buying of US dollar maximum at Tk 1, a decision which is already in place but no banks follow.

The BB reminded the banks about the spread at a tripartite meeting involving the central bank, the Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers' Association (BAFEDA). Ahmed Jamal, deputy governor, chaired the meeting held at the BB headquarters on Sunday.

The central bank sat with the two key stakeholders to discuss the issues relating to the volatile exchange rate market. Banks are allegedly booking huge margins by selling dollars, according to exporters.

"We've instructed the ABB and BAFEDA to review the spread between selling and buying of the US dollar and inform us accordingly," BB spokesperson Md Serajul Islam told reporters after the meeting.

As per the fresh review of the spread, authorized dealer banks will be allowed to take a maximum of Tk 1 as the margin between weighted average selling and buying rates of dollars.

He also said the BB would continue to support the banks and monitor the situation in the exchange rate trade.

Bangladesh’s imports were $82.49 billion in the fiscal year 2021-22, up from $60.68 billion a year ago while export earnings increased to $49.25 billion from $36.90 billion.

Currently, all the AD banks, which can buy and sell foreign currencies) are allowed to maintain the margin at a maximum Tk 1 between selling and buying of the US dollar in line with a BAFEDA recommendation.

In September 2006, the BAFEDA had told its member-banks to maintain the gap at maximum Tk 1 for BC (bills for collection) selling and TT (Telegraphic Transfer) buying of the US dollar.

The meeting also discussed the latest situation on the overall situation in the foreign exchange market. BB informed bankers that the gap between outflow and inflow of the foreign exchange is reducing gradually. LC opening for imports declined to $1 billion in the first 11 days of August, according to the BB spokesperson.

Monetary Policy Stance
Budget 2020-21