Dollar gets even pricier

The taka depreciated once again against the US dollar in the inter-bank platform yesterday. 

The exchange rate stood at Tk 94.45 per dollar. It was Tk 93.95 on Wednesday.

On July 21 last year, the rate was Tk 84.80, which means there has been a 11.38 per cent loss in value in a year.

The country's foreign exchange market is facing a shortage of US dollars due to rising import payments and declining inflows of remittance.

Import payments have been going up since the end of last year because of a rise in the prices of commodities in the global market.

Between July and May of last fiscal year, import payments went up by 39 per cent year-on-year to $75.40 billion while exports grew 33 per cent to $44.58 billion.

This resulted in a record trade deficit -- the gap between exports and imports -- of $30.81 billion, up 48.8 per cent year-on-year.

The inflow of remittance, the cheapest source of foreign currencies for Bangladesh, fell 15 per cent year-on-year to $21.03 billion in fiscal year 2021-22.

The country's foreign exchange reserves stood at $39.67 billion on Wednesday, in contrast to $46.15 billion in December last year.

Bangladesh Bank injected $70 million into the market yesterday to keep the market stable, Md Serajul Islam, spokesperson for the central bank, told The Daily Star.

The BB has so far injected $808 million in the market this fiscal year after supplying a record $7.62 billion last fiscal year.

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said the central bank should reduce the injection of dollars into the market to shield the reserves from the pitfalls of a declining trend.

He said the state-run banks, which were now receiving the greenback from the central bank to import petroleum and other essential commodities, should manage the fund from other banks.

Ensuring a floating exchange rate of the taka against the dollar will help turn the platform vibrant as many lenders are showing reluctance to sell dollars using the window, he said.

Banks are now charging a much higher rate in selling dollars to importers than what the central bank had asked them to follow, which is why the inter-bank platform has almost become inoperative.