The price of the remittance dollar increased up to Tk119.40 after the central bank instructed several banks to raise the rates to encourage more dollar inflows.
According to senior bank officials, remittance inflows had declined over the past week due to disruptions caused by the quota reform movement, a five-day internet blackout, and a three-day bank closure.
To boost the flow of remittances, the Bangladesh Bank issued verbal instructions to several banks on Sunday to purchase remittance dollars even at higher rates. As a result, the remittance dollar rate surged by 60-70 basis points in a single day, they say.
On Sunday, the rate had also increased by 10-20 basis points compared to the day before, with banks buying remittance dollars at Tk118.80.
A Bangladeshi expatriate in the United States told TBS today that the popular exchange house MoneyGram was offering Tk120.69 per dollar for remittances, while Western Union was quoting Tk119.35 per dollar. On Sunday, the rates offered by firms were below Tk119.
According to central bank data, remittances came in at just $1.58 billion in the first 27 days of July. Remittances came in at $2.25 billion last May, and $2.54 billion in June after the dollar appreciated by Tk7, earlier.
Speaking on condition of anonymity, a deputy managing director of a private bank told The Business Standard that several exchange houses began asking for higher dollar rates for remittances starting today morning.
“Dollars were offered to us at a rate of Tk119.50. However, it is difficult to buy dollars and sell them to customers at such a high price. So we didn’t purchase many remittance dollars today [Monday],” he said.
However, the exchange houses claimed that they did not significantly increase the dollar rate for remittances.
A country manager of a leading exchange house told TBS that the dollar is currently being sold to banks at a rate of Tk119.20.
“Banks were unable to make their import payments while the internet was down for a few days, and payment pressure has increased since the internet was restored,” he said.
“As a result, the demand for dollars has risen. Additionally, the dollar rate has increased slightly due to the low remittance flows last week,” he added.
Commenting on the dollar price in the formal channel nearing that of the informal channel, the official said that the current rate for remittances sent through hundi is Tk121.20-Tk121.50. The difference between the formal and informal channels is now Tk2 per dollar.
“Additionally, the government provides a 2.5% cash incentive for money sent through legitimate channels. As a result, customers are not receiving lower rates as they did before when using formal channels,” he explained.
Syed Mahbubur Rahman, managing director & CEO of Mutual Trust Bank, confirmed the increase in the dollar rate for remittances. “We have not yet returned to a normal situation in the flow of remittances. I think we will need a few more days to get back to normal,” he added.
Dollar price rises to Tk123 in kerb market
Along with the increase in the remittance dollar rate, the dollar rate also rose by Tk1 to Tk123 in the kerb market today.
Several money changer establishments reported that the demand for cash dollars has increased in recent days, driving up prices.
Despite this, a policymaking official of a private bank told TBS, “We have enough cash dollars and are currently selling them at a maximum rate of Tk118.50. However, unlike the kerb market, we do not sell dollars to all types of customers. Customers must present their passports to purchase dollars from us.”
TBS
