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 $35 million.
On 18 September, the dollar stood at Tk105.50, down Tk1.25 from the previous day. The authorities said dollar trading by banks per day also rose in the meantime.
Ahsan H Mansur, executive director of the Policy Research Institute, said allowing multiple rates for US dollars is a wrong decision that cannot last for a long time.
He proposed following the interbank exchange rate as the uniform dollar price. “To encourage the export, exporters could be offered Tk1 less than this rate. At the same time, the central bank should increase the monitoring.”
The differences in dollar buying rates between different banks are decreasing slowly, which the banks celebrate as the second achievement of export proceeds and remittance rate fixing.
Data from the foreign exchange dealers’ association show the average dollar price was at Tk103.43 on 12 September. On that day, banks bought dollars at a minimum of Tk98 to a maximum of Tk110.18. The gap was more than Tk12.
After a week on Monday, the average stood at Tk102.56. The minimum and maximum dollar buying rates by banks were Tk98.65 and Tk107.92 as the gap narrowed to Tk9.
Commenting that it is not possible to comment on the market stability in such a short period of time, Association of Bankers, Bangladesh Limited Chairman Selim RF Hussain said that stability does not necessarily imply higher or lower dollar rates. Rather it means the rate remains stable for a period of time.
“Our market will take time to be stable,” he said.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
Syeda Rizwana Hasan, the Adviser for Environment, Forests, and Climate Change, announced today that steps will be taken to restrict the use of polythene shopping bags to safeguard future generations.
Starting from October 1, polythene bags will be banned in shopping malls, followed by a ban in kitchen markets from November 1.
“Everyone must take responsibility and stop using polythene voluntarily. Action against polythene producers will begin from November 1,” Rizwana Hasan stated during a seminar.
The Department of Environment (DoE) organized the seminar to raise public awareness about alternatives to banned polythene bags.
Rizwana Hasan highlighted that the restriction on polythene will be executed in phases according to legal provisions, and discussions with shopping centers and store owners are ongoing to ensure a smooth transition.
She also announced plans to make the government secretariat a plastic-free zone by December.
Other speakers at the seminar included Environment Secretary Dr. Farhina Ahmed, DoE Director General Dr. Abdul Hamid, Director Rajinara Begum, President of the Shop Owners Association Muhammad Helal Uddin, and Md. Arifur Rahman Bhuiyan, Assistant Professor of Environmental Science at BUP. They discussed the harmful effects of polythene and the need for alternative products.
Earlier, Rizwana Hasan inaugurated a fair showcasing eco-friendly alternatives to polythene bags and visited 24 stalls. The fair featured products from government and private entrepreneurs, including reusable bags, jute bags, paper bags, and items made from bamboo and cane.
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