Banks can fix dollar rates for remittance, LCs: BB

The Bangladesh Bank (BB) has withdrawn the provision of a fixed rate for dollars for remittance and Letters of Credit (LC).

However, the central bank will sell dollars at a fixed rate, said a Bangladesh Bank senior official. 

He also said, the rates fixed by BB for remittance inflow and letters of credit (LC) has been withdrawn. The banks can set the rates on their own accord.

A senior official of the treasury department of a state-owned bank said that the rate set by Bangladesh Bank for the collection of remittances would have a major impact. So, the rate has been lifted by the central bank.

However, banks have been asked to be vigilant so that the price of dollar is not increased suddenly. The foreign exchange houses have been asked to ensure the same.

Serajul Islam, spokesperson for the Bangladesh Bank, said, the commercial banks in the country have already been informed that they can set the dollar price on their own in line with the market.

"The decision was taken considering a decrease in remittance inflow through formal channels and the plight of exporters. The rate has been left to be fixed according to the market price to give priority to the foreign currency earners amid the volatile condition of the international market" Serajul Islam.

He also said that a few teams have been assigned to monitor the banks and oversee the foreign currency exchange of the banks.

Asked if lifting the dollar rate cap would affect inflation, he said inflation is also on the rise in other parts of the world.

"We are not out of the system. However, inflation can be controlled with some tools other than the dollar price. We are currently monitoring the situation and further action will be taken accordingly," said the BB spokesperson.