Banks want taka to be devalued by Tk 2

Banks today recommended depreciating the local currency by nearly Tk 2 against the US dollar as they submitted their proposed interbank exchange rates of the taka to the central bank.

The Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers' Association (BAFEDA) suggested the Bangladesh Bank to fix the interbank rate at Tk 89.8 per dollar in contrast to the existing rate at Tk 87.9.

They submitted four rates of the taka against the dollar to BB Governor Fazle Kabir.

As per the recommendations of the two organisations, the rate the for importers should be fixed at Tk 89.95 per USD compared to the existing Tk 88.

For exporters, it should be Tk 88.95 and Tk 89.75 for the exchange houses, according to the letter.

The banking regulator arranged a meeting with the ABB, an organisation of managing directors of banks, and the BAFEDA, a platform of the banks involving in foreign exchange-related business, on Thursday in order to bring back stability in the country's foreign exchange market.

Banks are now facing acute dollar shortage due to the soaring import payments amid the global supply chain disruption.

The coronavirus pandemic had initially disrupted the global supply disruption, after which the Russia's invasion of Ukraine has worsened the crisis.

Against the backdrop, Bangladesh's foreign exchange market has started to face a haphazard situation as most of the banks are ignoring the central bank's instruction.

Although the central bank has fixed the BC (bills for collection) rate—at which banks sell dollars to importers—at Tk 88, banks are chiefly ignoring the rate and are instead charging more than Tk 95-97.

The Bangladesh Bank at the meeting asked the two organisations to propose the exchange rates of the taka against the American greenback given the market demand.

But the BB asked banks not to propose the rates higher than Tk 90 per dollar.