BB sits with bankers today to talk forex volatility

Bangladesh Bank will sit with the Association of Bankers, Bangladesh (ABB) today to discuss the ongoing foreign exchange volatility in the country's banking sector.

A Bangladesh Bank official said they would ask the ABB, a platform of managing directors of banks, to set exchange rates to purchase and sell dollars to exporters, importers and remitters based on the central bank's inter-bank exchange rate.

Bangladesh Bank Governor Fazle Kabir will take part the meeting to be held at the central bank headquarters in the capital.

The country's foreign exchange market has been facing an acute dollar shortage in the last couple of weeks due to soaring import payments.

Against this backdrop, the central bank has depreciated the exchange rate of the taka against the US dollar six times this year.

The exchange rate of the taka stood at Tk 87.90 per dollar yesterday, down 3.65 per cent year-on-year.

The majority of banks are now selling the American greenback at about Tk 95-97 per dollar to importers by ignoring the bills for collection selling rate, the rate at which importers purchase USD from lenders set by Bangladesh Bank.

Similarly, banks now also purchase USD at Tk 95-96 per dollar from exporters.

This has left the foreign exchange market in a haphazard situation.

The central bank is now giving efforts to bring back stability in the foreign exchange market.

As part of the move, the central bank yesterday injected $50 million into the market in order to help banks settle import bills.

The central bank has so far supplied a record $5.81 billion to the market this fiscal year.

The foreign exchange reserves are now hovering around $42 billion in contrast to $46.15 billion in December. The reserves surpassed a record $48 billion in August.