The Bangladesh's dollar market is once again in turmoil, with the price of the US dollar surging by Tk7-8 within the past week, reaching Tk128-129. Just seven days earlier, the rate had been Tk121-122, signaling a return of volatility after five months of relative calm. This surge is causing significant concern among importers and policymakers.
Sources suggest that the Bangladesh Bank's recent directives to settle outstanding import liabilities by December have driven up demand for dollars, contributing to the spike. Banks, too, have been purchasing dollars at elevated rates of Tk126-127, further destabilizing the market. In response, the Bangladesh Bank has intervened by setting the interbank dollar rate at Tk123 to curb the volatility.
Husne Ara Shikha, an executive director of the central bank, explained that the approaching Ramadan is leading to increased import activities, which in turn heightens the demand for dollars.
To address the ongoing instability, the Bangladesh Bank is considering a shift from its current crawling peg system to an auction-based system for dollar transactions. This untested system would allow market forces to determine rates, potentially offering more transparency and competition.
Despite these efforts, smaller importers continue to face difficulties as banks pass on the costs of higher dollar rates, creating added pressure on the market.
Bd-pratidin English/ Jisan
