Dollar crisis intensifiesBB wants to tighten monitoring over kerb market

Posted by BankInfo on Fri, Dec 23 2011 11:09 am

The crisis of US dollar is intensifying in the inter–bank market that pushed the exchange rate of the greenback to Tk 81.30 on Thursday, sources at the inter-bank money market said.

To overcome the crisis, the Bangladesh Bank (BB) initiated to tighten monitoring over the local kerb market as the rate of US dollar was volatile there during last couple of months, BB sources said.

The banking division also has sought explanation from the managing directors of state-owned commercial and specialised banks to know why the International Monetary Fund (IMF) has criticised the BB authority, state-owned banks and Bangladesh Foreign Exchange Dealer’s Association (BFEDA) for their failure to check drastic devaluation of taka against US dollar.

The global lender has also said that wrong policies of BB and BFEDA caused free fall of US dollar against local currency taka during last one year.

Banking division directives came at a meeting at finance ministry on Wednesday with managing directors of state-owned commercial banks and specialised commercial banks.

Banking Secretary Shafiqur Rahman Patwari presided over the meeting.

“We've bought dollar for Tk 80.95 on the day,” an inter-bank money market official said.

The demand for the greenback increased substantially to meet the growing requirement of foreign currencies by business people and patients at the end of this year, official also said.

A kerb market trader said: ‘The flow of dollar in the open market is being affected due to supply-side constraints’. Besides, the tough Anti-Money Laundering Act has discouraged the expatriate Bangladeshis send their hard-earned money through official channel, which gas worsened crisis for the greenback, he added.

The US dollar sold in the kerb market on the day was nearly Tk 3 more than the rate offered by the state-owned banks at the formal inter-bank market.

The selling rate of the greenback was Tk 84.20 on Thursday against buying rate of Tk 83.50 in the kerb market.

In the formal market, state-owned commercial bank Janata was selling the greenback at Tk 80.70 and buying at Tk 81.70 on Thursday, a treasury official of a commercial bank said.

The US dollar was quoted at Tk 80.88 -Tk 81.75 on Thursday by the private commercial bank AB Bank, while Citi Bank traded it for Tk 80.85-Tk 81.85, according to the central bank data.

Meanwhile, executive director of Bangladesh Bank (BB) Jahangir Alam said the country’s kerb market is now volatile. The unhealthy competition at the market should be stopped to ease dollar rate against local currency taka, he added.

Concerned authorities of the government should monitor the kerb market to stop abnormal hike of US dollar, he added.

Alam also pointed out that crisis of US dollar may intensify in local market as the amount of import raised during couple of months.

The Daily Sun/Bangladesh/ 23th Dec 2011

Posted in Banking, News