New guidelines with a specified maximum rate have been implemented by Bangladesh Bank to decide the price of the dollar in the future (forward rate). According to these rules, the bank may charge a maximum of 5% more than the Six Months Moving Average Rate of Treasury Bills (SMART) rate after the first year.
This rule was put into effect by the central bank via a notification that was released on Sunday. The process used to determine interest rates is called SMART, or Six Months Moving Average Rate of Treasury Bill. This rate is made public by Bangladesh Bank at the start of each month. In July, the SMART rate was 7.10%; it rose to 7.14% in August; and it stayed the same in September.
One must pay Tk 123.35 per dollar after a year if they reserve dollars for the future now. The price will drop each month if the pricing is done on a monthly basis. The price in dollars for imports is currently Tk 110.
Bangladesh Bank introduced the new rule yesterday, taking action against 10 private sector banks for selling dollars at high prices to importers. However, some of these banks told Prothom Alo that they set higher prices for importers when collecting forward rates.
According to information from various sources, the 10 banks facing penalties are Mercantile Bank, Premier Bank, BRAC Bank, Madhumati Bank, Midland Bank, Exim Bank, Social Islami Bank, Al-Arafah Islami Bank, Shahjalal Islami Bank, and Trust Bank. Sources suggest that some more banks may also face penalties.
Future prices can be established for both buying and selling dollars. An importer can purchase dollars now and import goods within a year, necessitating an additional commission to the bank based on the prevailing dollar prices.
The importer is required to pay the agreed-upon current price even if the price decreases during that time. They will benefit, meaning they won’t have to pay more, if the price rises once more. Exporters can also sell dollars at predetermined intervals in the interim. If the price declines in this case, the exporter can suffer losses.
Following the direction of the Bangladesh Bank, the Bangladesh Foreign Exchange Dealers Association (BFEDA) and the Association of Bankers, Bangladesh (ABB) have been periodically establishing the dollar price based on supply and demand dynamics. Every month, the dollar’s official price goes up.
As per the recent decision, the price for purchasing a dollar for export income of goods or services sector and a dollar for remittance has been set at Tk 109.50 starting this month. Previously, banks officially paid Tk 109 for remittance and Tk 108.50 to exporters for every dollar.
Banks, on the other hand, are currently offering Tk 110 for the sale of dollars to importers. In the past, banks would sell to importers for Tk 109.50 every dollar in order to satisfy their import obligations. There are grievances, though, that the dollar isn’t really being bought and traded at this price.
All banks offer dollars for sale at their stated rates. The pricing will vary from the scheduled price if the transaction includes more than USD 10,000 and is based on the bank-customer relationship.