Economy
Ease for Banks as Trade Rate Drops
The interbank exchange rate of USD and average dollar buying rates by banks started to decline just a week after the public and private banks took up some special measures in coordination with the central bank.
According to the central bank, banks traded dollars among themselves at a maximum of Tk105.50 on Sunday. The price was at Tk106.75 just the previous day.
Bankers said the crisis in the dollar market had eased up slightly, but they wanted to observe for a few more months to say anything concrete.
On 12 September, banks started charging Tk99 for export proceeds while paying Tk108 for remittances. Besides, they adopted the weighted average for the past five days to determine the dollar rate instead of imposing day-to-day buying and selling rates.
Several sources of the Bangladesh Foreign Exchange Dealers’ Association (Bafeda) and the Association of Bankers, Bangladesh Limited (ABB) said streamlining the interbank dollar exchange had been a remarkable achievement in the last week.
Before the dollar market became unstable, the central bank used to set a dollar rate at which banks would trade the greenback among themselves. Even in the wake of the dollar crunch, the central bank did not update enough the interbank dollar market for the first five months – allowing remittances to remain the key source for banks to procure US dollars.
Foreign exchange dealers and bankers said the interbank exchange has eased up the market pressure to some extent.
According to the Bangladesh Bank, banks traded $16 million on 12 September at Tk106.15. The price rose slightly to Tk106.90 the next day as the trading stood at $35 million.
On 18 September, the dollar stood at Tk105.50, down Tk1.25 from the previous day. The authorities said dollar trading by banks per day also rose in the meantime.
Ahsan H Mansur, executive director of the Policy Research Institute, said allowing multiple rates for US dollars is a wrong decision that cannot last for a long time.
He proposed following the interbank exchange rate as the uniform dollar price. “To encourage the export, exporters could be offered Tk1 less than this rate. At the same time, the central bank should increase the monitoring.”
The differences in dollar buying rates between different banks are decreasing slowly, which the banks celebrate as the second achievement of export proceeds and remittance rate fixing.
Data from the foreign exchange dealers’ association show the average dollar price was at Tk103.43 on 12 September. On that day, banks bought dollars at a minimum of Tk98 to a maximum of Tk110.18. The gap was more than Tk12.
After a week on Monday, the average stood at Tk102.56. The minimum and maximum dollar buying rates by banks were Tk98.65 and Tk107.92 as the gap narrowed to Tk9.
Commenting that it is not possible to comment on the market stability in such a short period of time, Association of Bankers, Bangladesh Limited Chairman Selim RF Hussain said that stability does not necessarily imply higher or lower dollar rates. Rather it means the rate remains stable for a period of time.
“Our market will take time to be stable,” he said.
The Kazipara and Mirpur-10 metro stations, which have been closed, are expected to reopen by the end of September, though the exact date has not yet been confirmed. Mohammad Abdur Rauf, Managing Director of Dhaka Mass Transit Company Limited (DMTCL), told TBS that a technical team has been tasked with resolving the issues at the stations.
“We are working to reopen the two stations within this month, but I cannot give a specific launch date yet. We will hold a meeting with the technical team and other stakeholders soon to review the progress. A decision is likely on 18 September,” Rauf said.
He noted that Kazipara station is likely to open earlier due to less severe damage, while Mirpur-10 may face delays as it requires machinery that needs to be imported.
Additionally, Rauf mentioned plans to begin metro rail operations on Fridays starting from 20 September, with efforts being made to meet this timeline.
Dr. Muhammad Yunus, the Chief Adviser of the interim government, has announced the formation of six commissions as an initial step toward reforms, including constitutional amendments. These commissions are expected to begin operations on 1 October and complete their work within three months.
In an address to the nation on Wednesday evening (11 September) from the Chief Adviser’s Office, Yunus outlined the government’s reform agenda. This is his second national address since taking office on 8 August.
Yunus explained that the formation of the six commissions is the first step in a broader plan for constitutional reform. He stated that the commissions would be led by six distinguished citizens, selected based on their expertise. These commissions will tackle various reform areas, and more will be established in the future.
Emphasizing the importance of constitutional reforms for free and fair elections, Yunus stated, “We believe that imposing majority rule through elections, resulting in misgovernance or consolidating all power into the hands of one person, family, or group, is unacceptable. To prevent this, we are considering reforms to institutions like the Election Commission and others involved in the election process. Reforming the police administration, civil service, judiciary, and Anti-Corruption Commission is essential for ensuring fair and transparent elections. These reforms will also contribute to establishing a state system based on public ownership, accountability, and welfare.”
Yunus announced the names of the six commission heads:
- Dr. Badiul Alam Majumdar will lead the Election System Reform Commission.
- Sarfaraz Chowdhury will head the Police Administration Reform Commission.
- Justice Shah Abu Naeem Mominur Rahman will lead the Judiciary Reform Commission.
- Dr. Iftekharuzzaman will lead the Anti-Corruption Reform Commission.
- Abdul Muid Chowdhury will head the Public Administration Reform Commission.
- Dr. Shahdeen Malik will lead the Constitutional Reform Commission.
The Chief Adviser mentioned that the other members of these commissions would be determined in consultation with the heads. Additionally, representatives from the advisory council, students, workers, social movements, civil society, and political parties will participate in the commissions’ discussions.
Yunus expressed hope that the commissions would be fully operational by 1 October and complete their work within three months. Based on the commissions’ reports, the government plans to organize consultations with major political parties. A broad consultation, lasting three to seven days, involving students, civil society, political party representatives, and the government will follow. This consultation will finalize the reform framework and outline its implementation strategy.
Yunus concluded by stating that this initiative will unify the nation, fulfilling the demands of the July uprising and strengthening the country with renewed hope and optimism.
The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has urged the Bangladesh government to implement a more investment-friendly tax structure to enhance foreign investor confidence.
During a meeting on Wednesday (11 September) with the newly appointed chairman of the National Board of Revenue (NBR), Abdur Rahman Khan, FICCI leaders highlighted the need for comprehensive tax reforms that would position Bangladesh as a more attractive destination for foreign direct investment (FDI) and strengthen the national economy.
Zaved Akhtar, President of FICCI, stressed the significance of fully digitising NBR operations, particularly by advancing automation systems to maximise revenue collection, as outlined in the chamber’s press release.
The delegation also recommended the establishment of a dedicated research unit within the NBR to broaden the tax base and increase revenue through in-depth market analysis, identifying gaps between market share and revenue generation.
NBR Chairman Abdur Rahman Khan acknowledged the importance of automation in stimulating economic progress and welcomed FICCI’s research findings on the taxation landscape.
FICCI’s delegation included Senior Vice President Eric M. Walker, other board members, and senior officials from member companies, alongside key officials from the NBR.
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