Banks settle LCs at Tk107 per dollar

Banks settled letters of credit (LCs) for import at maximum Tk107 per dollar, while the price of the greenback fell to Tk111 at the kerb market yesterday, continuing the downward trend of the dollar price for the last few days.

Due to a crisis, the LC settlement rate reached Tk112 per dollar on 8 August.

On that day, the central bank ordered the removal of the treasury department heads of one foreign and five local banks as they were making excessive profit from trading dollars.

Due to this decision, the price of dollars in LC settlement fell to Tk110 on the next day. It further fell to Tk109 on 11 August. Yesterday, the banks further reduced the LC settlement rate to Tk107 for imports.

Heads of treasury departments at a number of banks told TBS that many exporters were coming to the banks to encash their export payments as the dollar price started to decline. Consequently, the supply of dollars has been increasing.

Exporters received Tk104-105 per dollar for encashing their export proceeds yesterday.

The exchange houses have reduced the rate for selling remittance dollars too. They asked Tk108 per dollar from the banks for transferring remittances yesterday. They asked Tk112-113 per dollar when the market was highly volatile.

The head of the treasury department of a private bank told TBS that they have been trying to keep the dollar price down fearing punishment after the central bank asked the commercial banks not to make more than Tk1 profit from trading the greenbacks. As a result the price of the dollar has been decreasing.

Meanwhile, the central bank sold $80 million from reserves on Tuesday. It has sold over $1.61 billion since July of the current fiscal year.

Dollar sells at Tk111 at kerb market

Due to the decline in the dollar price in banks, the dollar price decreased in the kerb market. Most exchange houses in the country bought dollars at Tk110 and sold it at Tk111 yesterday.

The price of the dollar crossed Tk120 at the currency exchange houses on 11 August due to the acute shortage of greenbacks. However, due to the tough stance of the Bangladesh Bank, the dollar price fell by Tk8 to Tk112 taka on Sunday. Yesterday it dropped further to Tk111.

Murad Hasan, owner of Murad Money Changer in Motijheel area of the capital, told TBS, "Currency exchange houses like ours currently have a considerable amount of dollars as many people sold dollars to us in the last two days.

"However, the number of people buying dollars has decreased. The price of the greenbacks is also dropping for these reasons. On Tuesday afternoon, I could not sell dollars even at Tk110," he added.

The central bank has recently suspended the operations of five money changers for influencing the price of dollar in the open market and irregularities. Besides, the Bangladesh Bank also warned 42 money changers regarding various issues.