Dollar gets costlier
Hajj pilgrims and a slow remittance inflow fuel demand
The dollar was selling at Tk 78.40 yesterday at different exchange houses and in the kerb market.The inter-bank rate crossed Tk 75, up from Tk 74 just two weeks ago.
“We are facing a scarcity of dollars. An absence of travellers' cheque has also created pressure on the cash dollar,” said the head of treasury of a private bank.
A slowdown in the inflow of remittance, which is common during the post-Eid period, has also pushed up the greenback price, he said.
Hajj season always increases the demand for the dollar. About 110,000 Bangladeshis will perform Hajj this year and if they spend $1,000 each, the total demand for the dollar will stand at $110 million.
On the other hand, the total cash dollar available in the country is around $20 million only, according to Bangladesh Bank (BB). So, there is a huge gap in the demand and supply.
The BB, however, expects the pressure on the dollar would not be so much as many pilgrims would buy Saudi riyal, which was also priced higher in the yesterday's market.
A Saudi riyal was being sold at Tk 20.60 yesterday from less than Tk 20 a week ago, said a kerb market trader in the capital's Dilkusha area.
Kazi Saidur Rahman, general manager, foreign exchange treasury management of the central bank, said the BB welcomes banks' move to import the dollar.
“Some banks may form a syndicate and approach the BB to import the dollar to meet their growing demand,” said Rahman. “But no bank has applied so far this year,” he added.
A senior treasury official of another private bank was surprised to see the BB's 'liberal attitude', which did not work because of the National Board of Revenue's adherence not to give any tax rebate on the import of dollar.
In 2010, some banks led by Standard Chartered Bank Bangladesh initiated a move to import $10 million to increase the currency inflow. Though the BB and other government agencies gave a go-ahead to the move, the NBR did not agree to waive the tax that was at around 25 percent for dollar import.
“If tax is not waived, the import price of a dollar will be more than the local market price,” said a senior StanChart official, explaining why bank did not import dollar although it got an approval from the central bank.
However, some Bangladeshi banks exported dollars in 2008-2009 as they had a surplus.