Bangladesh Bank (BB) officials are in the dark as to why the value of cash greenback went up last week unusually to over Tk 84 despite having cash 20 million dollar in circulation in the country, sources said.

Usually $15 million is found good enough to meet any situation, they added.

The sudden hike in the value of greenback from Tk 79 to over Tk 84 created an uproar compelling the central bank to put an unofficial cap on selling price of US dollar by banks.

At this stage, the central bank decided to probe the price hike and go for tougher action against banks, if any of them is found involved in manipulation.

The BB will sit with treasury heads of 20 banks tomorrow (Sunday) to discuss the issue and get a briefing on reasons behind the price hike of US dollar.

"We don't know why it happened. We'll definitely look into it, and take actions, if anyone is found guilty," Deputy Governor of the central bank Abu Hena Mohd Razee Hassan told the FE Friday over phone.

He said if the issue is not investigated now, a similar situation may recur.

"Four to five weeks back, I knew that the volume of cash dollars available in the country stood at $20 million, much higher than the need," Mr Hassan said.

He said $14 million to $15 million in cash is good enough to meet any need.

Officials said in January this year that the central bank had taken a move to import cash dollars as its volume came down to nearly 7.0 million. But the move did not materialise following a row over charging duty on cash dollar import.

The national board of revenue (NBR) did not agree to give import duty waiver on cash dollar import.

However, according to Mr Hassan, cash dollar flow went up significantly in the following months, contributed by travellers and wage earners.

In Bangladesh, the foreign currency price is being determined by market forces since floating exchange rate was introduced in 2003.

The central bank fixes inter-bank rate of foreign currencies, but does not control their prices. Bangladesh Bank is also a market player in foreign currency trading, officials said.

Managing Director and CEO of Mutual Trust Bank Limited (MTB) Anis A Khan told the FE over phone that there is no ceiling on foreign currency selling prices. "The market determines the price."

"It's a rare aberration," he said pointing to unusual price hike. "It was unexpected."

Asked whether banks could have sought dollar supply from the central bank in the event of a shortfall, Mr Khan answered in the negative. He said getting cash dollars from the central bank takes time.  

Mr Khan, also Chairman of the Association of Bankers, Bangladesh, said the central bank can take action against anyone found involved in the price manipulation of US dollar.

He said the treasury heads of the banks, who deal with foreign currency transactions, need to be more mature in understanding and controlling the market.