Bangladesh Bank caps remittance collection rate at Tk123 per dollar: Spokesperson
Aside from capping the exchange rate for remittance collection, the central bank has also implemented a dashboard to monitor market data closely, ensuring greater transparency and control
The Bangladesh Bank has officially announced a maximum exchange rate of Tk123 per dollar for remittance collection in a bid to stabilise exchange rates.
Earlier, the rate was said to officially be Tk120.
For cross-currency transactions, the calculated rate cannot exceed this limit, confirmed Bangladesh Bank spokesperson Husne Ara Shikha today (30 December).
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Amid the turmoil faced by the country's foreign exchange market, the central bank has drawn up this measure, alongside others.
As the country's foreign exchange market is facing turmoil due to surging dollar demand, Bangladesh Bank has identified key causes and is implementing corrective measures, according to officials.
Aside from capping the exchange rate for remittance collection, it has also implemented a dashboard to monitor market data closely, ensuring greater transparency and control.
According to officials, the central bank attributed the ongoing dollar market volatility to several interconnected factors.
One of the reasons is the increased demand for dollars at the end of the financial year, which sees a spike in loan repayments and other financial obligations. Compounding this is the central bank's recent suspension of dollar sales to meet IMF-mandated targets.
This decision has restricted the supply of dollars in the interbank market, further widening the gap between demand and supply.
Besides, Bangladesh's downgraded credit rating has disrupted correspondent relationships with foreign banks, making issuing UPAS (Usance Payable at Sight) letters of credit, deferring payment maturities, and maintaining the inflow of offshore banking loans more challenging.
Another significant factor is the role of aggregators and intermediaries in remittance collection.
A mismatch in dollar inflows and outflows by commercial banks has further complicated the situation.
Bangladesh received nearly $27 billion in remittances this year – reflecting a 22% year-on-year increase – bolstered by a 9% rise in the official dollar rate and a decline in money laundering during the final five months.
According to data from the Bangladesh Bank, remittances through formal channels totalled $26.67 billion from January to 28 December, an increase of about $4.7 billion from $21.92 billion in 2023.
After the interim government took office in August, the rate was increased to Tk120. By December, the dollar rate rose to Tk128, but the central bank's verbal instructions capped transactions at Tk123. This represents an increase of at least Tk10 or 9%.
