Businesses urge BB directive to ensure fixed-rate dollars

Businesses on Sunday expressed concern about facing higher costs of dollars than the official exchange rate when opening letters of credit (LCs), urging the Bangladesh Bank to issue a directive to address the issue.

"Businesses are unable to open LCs due to the dollar crisis. Banks are also discouraging opening LCs due to the dollar crisis," Anwar-ul Alam Chowdhury, president of the Bangladesh Chamber of Industries (BCI), told journalists after a meeting with Bangladesh Bank Governor Abdur Rouf Talukder.

Moreover, the dollar is not available at the rate announced by the Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers Association (Bafeda), he added.

"While opening LCs, it appears that the dollar value is very high. So, the Bangladesh Bank should give a directive on this matter," said the business leader.

In response to a question, Anwar-ul Alam said the governor informed them that the country's current account had turned positive from negative earlier.

"The governor aims to improve the financial account. He has advised us to be patient and wait for that to occur," he added.

The BCI president stated that the governor believes the dollar crisis will be resolved within this year.

"The Bangladesh Bank took the initiative to monitor LC openings. As a result, over-invoicing and under-invoicing are no longer occurring as before. This has led to the current account showing a positive balance," Anwar-ul Alam quoted the governor as saying.

"Because of this, the governor is hopeful that the dollar crisis will soon dissipate. We want to have faith in the steps taken by the Bangladesh Bank. We also believe that the problem will be resolved swiftly," the BCI leader said.

Anwar-ul Alam also expressed concern that bank loan interest rates are increasing day by day, making it difficult for industries to survive.

"We are facing challenges within the industry, with many questions arising," he said. "In this regard, the governor informed us that they aim to reduce inflation to 6%, hence the increase in loan interest rates. They have no alternative to do about it for now."

He said, "However, the governor also assured us that they have not left the determination of interest rates solely to banks to prevent sudden spikes. The central bank is monitoring the situation, and he believes that the policy will gradually lead to improvement."

Anwar-ul Alam, also a former president of the Bangladesh Garment Manufacturers and Exporters Association, mentioned that banks are turning to Treasury bonds for secure investments, claiming economic uncertainties.

"If bonds are promoted, banks will invest in them because it is a secure investment," he said.