Despite the recent decline in the official bank rate for the US dollar, the open market in Dhaka continues to sell the currency at a higher rate, highlighting a growing disparity between institutional and street-level transactions.
While the bank exchange rate for the US dollar has dropped to Tk 121.50, in the capital’s open market, the greenback is being sold at rates ranging from Tk 125.20 to Tk 125.50.
Money exchange booths across areas like Dilkusha, Purana Paltan, and Gulshan show a noticeable drop in customer turnout. The usual buzz of street-side currency callers has also subsided. According to vendors, the supply of dollars is relatively high, but demand has declined.
To absorb the excess dollar liquidity in the market, the Bangladesh Bank purchased $480 million from commercial banks over the last two days. As a result, the interbank dollar rate declined from over Tk 123 a month ago to Tk 121.50 now.
The central bank is attempting to stabilize the market by buying dollars from banks and adding them to the country’s foreign exchange reserves. This marks a rare intervention in recent months, prompted by lower import expenditures and increased foreign exchange inflows.
According to Bangladesh Bank sources, ever since the move towards market-based pricing, commercial banks have been trading dollars among themselves more regularly and in line with international best practices. Additionally, banks are showing restraint in purchasing remittance dollars, opting to buy them at lower rates.
This policy shift aligns with one of the International Monetary Fund’s (IMF) key conditions, which required the exchange rate to be determined by market forces. Bangladesh Bank is now advancing towards a single exchange rate, eliminating discrepancies in the pricing of import, export, and remittance dollars — a change that has further increased dollar supply.
As per central bank data, the dollar was traded between Tk 120.80 and Tk 121.50 on Tuesday (15 July). By Wednesday, the rate climbed slightly to between Tk 121.10 and Tk 121.60. However, open market vendors have retained their higher pricing, reflecting slower adjustment to banking trends.
Speaking to Banglanews, MS Zaman, President of the Money Changer Association of Bangladesh, said: “Banks may manage this, but we cannot. Our only source of dollars is from returning overseas travelers. We don’t get dollars from banks, nor are we supposed to. However, increased export earnings and remittance inflows have strengthened dollar supply in banks.”
He also said that the reduced cost of imports has led to a dollar surplus, prompting Bangladesh Bank’s recent purchases — a move not seen in months. This surplus has impacted the open market, where customer numbers have dropped significantly.
Zaman added, “We’re unable to lower our rates immediately because we bought dollars earlier at higher prices. Once those are sold off, we too will adjust to the lower rates.”
The dollar has declined globally amid rising inflation in the United States, which has had ripple effects on currency markets worldwide, Zaman said, adding this global shift is also contributing to the increased availability of dollars in Bangladesh.
SMS/
