Dollar market becomes more volatile as new record hits in price

The dollar market in the country has become unstable again. The dollar price in open market of the country is increased again. The cash price of dollar is increased in a day by Tk 4 and is being traded at record Tk 126.50. Even, its price was Tk 122 to 123 in Wednesday. The difference between bank and open market rate of dollar was little in last few months, but it was increased again.

In the banks under Association of Bankers (ABB), the organization of managing directors of private banks in the country and Bangladesh Foreign Delars Association (Bafeda), the dollar price is Tk 111. In open market, it’s sold from Tk 126.50 to Tk 127. According to the authorities concerned, after the Covid-19 outbreak, the demand of the dollar was increased in economy and the Russia-Ukraine war propelled this escalation more. However, in last few months, the difference in dollar exchange rate between bank and open market was very little. But, the difference in the price was increased again due to reduction in dollar-reserve in banks, the increase in number of outgoing students and increase in the transaction by hundee.

Reportedly, most commercial banks are not selling dollars to travelers. As a result, they are forced to go to the open market to buy it. Several money exchangers in the Motijheel of the capital told The Bangladesh Pratidin on Thursday that they were selling dollars from Tk 126.50 to 127. One of the money exchangers said people going abroad for medical treatment or travelling have been struggling to buy dollars. The prices listed by the money exchangers for the foreign currency are Tk 113.30 for sale and Tk 111.80 paisa for purchase. However, this rate is not accepted anywhere. Helal Uddin, the secretary of Money Changers Association of Bangladesh, said action will be taken against traders if they don’t accept the exchange rate announced by Bangladesh Bank.

Analysts say bank-fixed dollar prices have helped create increased demand in the open market. They think when expatriate Bangladeshis get Tk 127 per dollar in the open market, they will refrain from sending remittances through banks. In this regard, the executive director of the Policy Research Institute, Ahsan H. Mansoor said, “Central bank should introduce market-based exchange rates as per the terms of the International Monetary Fund (IMF). According to BMET data, 9,89,685 workers have gone to different countries of the world from January to September this year. In the same period of 2022, the number of workers went abroad was 8, 74, 739 people, which is a historic event in creating jobs abroad.

Since 2022, despite the record of sending workers abroad, the income of expatriates is decreasing. Again, the country's foreign exchange reserves are also getting weak. According to the Central Bank statistics, in last 41 months, the lowest remittance of $1.34 billion has been received in the country in September. Earlier, the lowest remittance came in April 2020 which was $1.09 billion.

(The report was published on print and online versions of The Bangladesh Pratidin on November 10 and rewritten in English by Lutful Hoque)