The Bangladesh Bank (BB) had no proper system in place for monitoring foreign exchange inflow and its utilisation before the sudden hike in price of US dollar in April last, a senior central banker admitted.

"Now we are monitoring everything. There was no effective monitoring then," BB executive director for Foreign Exchange Policy Department Ahmed Jamal told the FE.

People learn from mistakes, he said.

In April last, price of US dollar went up to Tk 84 from usual Tk 79 all on a sudden prompting the central bank to intervene.

The government also expressed concern over the unusual price hike of the greenback.

Following this, the central bank met treasury heads of 20 banks and asked them to submit forex transaction details for the entire month of April.

Mr Jamal told the FE Tuesday there was a mismatch in dollar inflow and utilisation which had triggered the hike in its value against Bangladesh Taka.

"But we did not find any foul play behind the dollar price hike," he said replying to a question.     

Asked what caused the dollar price hike, Mr Jamal said, there was a liquidity shortfall at that time. "Now it is gone."

He also said foreign banks do not bring in any remittance to the country but buy US dollars from the local market whenever they need. "We asked them to contribute to remittance inflow."

Asked if any measure was taken to stop the recurrence of such incident, Mr Jamal said everything is now being monitored. "We check the possible L/C payment for next one month and the arrangement to meet the dollar needs."

BB deputy governor Abu Hena Mohd Razee Hassan told the FE that foreign banks do not buy dollars from abroad; rather they purchase it from local market as a result of which shortfall is created sometimes.

"We will have to take some policy measures to engage all banks in bringing remittance," he said.

Mr Hassan had earlier told the FE that availability of $14 million to $15 million in cash is good enough to meet any need. But in April last, cash dollars worth $20 million were available.

He had said that a probe body would be formed to investigate the incident to stop recurrence of such shortfall and consequent price hike.

But, officials said, until now no formal probe body was formed to look into the matter.

news:financial express/8-jun-2017