Taka continues to fall against dollar
The taka has continued to fall against the dollar for two weeks now after nearly one year of an unchanged exchange rate, according to data from the Bangladesh Foreign Exchange Dealers’ Association.
“Market forces are determining the exchange rate,” said Kazi Sayedur Rahman, general manager of Bangladesh Bank’s foreign exchange reserve and treasury management department.
Though the trend is forcing businesses to pay more for their imports, it has become a boon for exporters and remitters. There is also a fear of inflationary pressure.
BAFEDA data shows the BC (bills for collections/import payments) selling rate reached nearly Tk 80 a dollar yesterday, compared to Tk 78.2 on October 26.
Citibank and Commercial Bank of Ceylon quoted the highest — of Tk 79.95 — for the BC selling rate a dollar yesterday, while ICB Islamic Bank the lowest, of Tk 78.3.
In the kerb market, the dollar traded at over Tk 82 yesterday, while the inter-bank exchange rate for a dollar was Tk 78.23, compared to Tk 77.88 on October 26, according to the central bank.
In fact, the inter-bank exchange rate remained unchanged at Tk 77.80 for the 10 months to October 25 this year.
Though the inter-bank exchange rate looks significantly lower than the market rate for import payments, the reality is that no banks have dollars to trade between them, said a senior treasury official of a private bank.
Replying to a query, Rahman said the BB will sell dollars if the market needs it. At present, Bangladesh’s foreign exchange reserves stand at around $27 billion.
Bankers blame the exchange rate fall on slow export growth, negative growth in inward remittances in October compared to the previous month, payment pressure from oil import by Bangladesh Petroleum Corporation and the increasing foreign currency loans extended by offshore banking units. Inward remittances fell about 19 percent to $1.09 billion in October from the previous month. Remittances grew 6.83 percent year-on-year in October.
The country’s export earnings rose 21.15 percent year-on-year to $2.37 billion in October, returning from a 5 percent decline in September.
It seems the taka will fall further, said a senior banker, adding that the trend is a temporary phenomenon.