DHAKA: Bangladesh’s central bank has ordered six banks to transfer their treasury heads to human resource departments because of their role in the country’s foreign exchange market volatility.

The banks are Standard Chartered Bangladesh, Brac Bank, Dutch-Bangla Bank Ltd, City Bank, Southeast Bank and Prime Bank, central bank officials said.

Bangladesh Bank has sent letters to the six banks, asking them to transfer their treasury heads, BB officials said.

They said treasury chiefs had helped their employers make excessive profits by taking advantage of the continued volatility in the foreign exchange regime, which saw the dollar’s exchange rate rise above 110 taka (Bangladeshi currency) amid a shortage of money. greenback.

Seeking anonymity, a BB official said banks were buying dollars from exporters at a lower rate but reselling them at a much higher rate to importers.

For example, importers now pay banks up to 112 taka to buy a dollar while banks buy it for 94 taka. .

Recently, exporters, importers and business leaders have publicly accused banks of making excessive profits. Banks in Bangladesh must sell and buy dollars based on the USD interbank exchange rate set by the central bank.

According to banking standards, lenders are allowed to offer 1 taka less than the interbank rate while buying dollars from exporters. They can sell greenbacks, adding 1 taka to the interbank rate.

The BB’s decision comes as volatility in the foreign exchange market shows no sign of abating, although the BB has already taken a series of measures amid rapidly depleting international currency reserves.

Higher imports, weaker-than-expected export earnings and falling remittances have pushed reserves below $40 billion now, from over $48 billion in August last year. ‘last year.

The taka lost more than 12% in value against the dollar in the interbank market, although the platform does not account for the bulk of dollar transactions.

Indeed, the interbank exchange rate does not reflect reality since the BB has maintained an artificially higher taka rate. If the platform was free from BB intervention, the exchange rate would have been much higher as it would be determined by supply and demand. Importers are forced to pay 112 takas for 1 dollar today, 30% more than a year ago.

About The Author

Related Posts