Exporters to get Tk105 per dollar

To expedite the process of bringing export earnings into the country, from now on banks will pay Tk105 per dollar, an increase of Tk1 from the previously set rate.

This is the third time this year that the exchange rate for export earnings in Bangladesh has been increased.

The new rate, set by the Bangladesh Foreign Exchange Dealers' Association (Bafeda) and the Association of Bankers, Bangladesh (ABB), will take effect on Sunday, ABB Chairman Selim RF Hussain told The Business Standard.

Earlier this year, the exchange rate for export earnings was increased twice. On 31 January, the rate was raised from Tk102 to Tk103, and on 1 March, it was further increased from Tk103 to Tk104.

Although the exchange rate for export earnings has seen several increases this year, the rate for remittances has remained stagnant at Tk107.

It has been alleged that at least 20 banks are collecting remittances at a rate higher than the fixed rate of Tk107.

Bankers have complained that some banks collected remittances at a rate as high as Tk114 on Thursday, which is above the fixed rate of Tk107. However, the reports submitted by the financial institutions to the central bank indicate that the rate was Tk107, the fixed exchange rate for remittances. 

The banks are allegedly collecting remittances at rates higher than the fixed rate of Tk107 and hiding these higher payments from their balance sheets using various techniques.

In such cases, the lenders are reportedly sending the excess amount exceeding the rate of Tk107 separately to exchange houses through negotiation, according to bankers. 

The managing director of a bank, who spoke to TBS on the condition of anonymity, stated that due to the increase in export proceeds dollar rates, the rate for import settlement is expected to go up slightly. However, it has been alleged that some banks are collecting remittances at rates higher than the fixed rate of Tk107, resulting in the dollar being sold for up to Tk115 in banks for import payments. 

Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has welcomed the increase in dollar rates for export proceeds.

"Currently, the amount of orders we receive here has decreased a lot compared to before. Also, many of our customers are taking longer to receive their previous orders, resulting in delays in receiving our payments," he told TBS.

"Now our priority is to pay the salaries and allowances of the workers on time for the upcoming Eid. In this situation, it would be good for us to increase the dollar price for export proceeds," he added.

On 11 September last year, the dollar rate was set at Tk99 for export proceedings and Tk108 for remittances. Later, the rate dropped to Tk107 for remittances in two rounds.

The exchange rate for export earnings has been raised by Tk5 in total, with each increase being Tk1 at a time.

Based on the analysis of the weighted average rate of dollar purchases of 58 banks by Bafeda on Thursday, National Bank reportedly bought the greenback at the highest rate of Tk107.30. The rest of the banks showed dollar buying rates below Tk107, with some banks buying the greenback at a minimum rate of Tk104. 

Banks typically sell dollars for letters of credit settlement after adding a maximum profit of Tk1 to their buying rate. 

Several bankers, who wished to remain anonymous, have stated that according to the rules of ABB and Bafeda, no bank is allowed to buy the dollar at a rate higher than Tk107. However, according to Bafeda's reporting, the weighted average rate of dollar purchases for some banks is more than Tk107, indicating that these banks may be admitting to purchasing dollars at a higher price.