Banks can set varied uniform rates for importers, exporters, foreign trade
SIDDIC ISLAM |
September 09, 2022 08:38:43
September 09, 2022 22:06:38
Commercial banks in Bangladesh will set varying uniform rates for importers, exporters and foreign exchange offices to help manage the current currency volatility.
Under the proposed rates, all Licensed Concessionary (AD) Banks will offer a maximum of Tk 108 per dollar to Foreign Exchange Bureaux for receiving incoming transfers instead of a maximum of Tk 113.
Banks will also quote a maximum of Tk 99 for obtaining export earnings from exporters instead of a maximum of Tk 101 while the rate for importers will be set in accordance with the weighted average rates of exchange offices and exporters.
These rate caps were discussed at a joint meeting of the Bangladesh Bankers Association (BBA) and the Bangladesh Stockbrokers Association (BAFEDA) at the central bank’s headquarters in Dhaka on Thursday with the Deputy -Governor of Bangladesh Bank (BB), Ahmed Jamal, in the chair.
The proposed rates are expected to be finalized at a meeting of key executives from ABB and BAFEDA, to be held at the headquarters of Sonali Bank Limited in Dhaka on Sunday.
ABB and BAFEDA executives will disclose the uniform separate rates for importers, exporters and foreign exchange offices at a press briefing after the meeting, according to a senior BAFEDA official.
“We took the decisions in a meeting held at the headquarters of Sonali Bank Limited on Thursday evening,” the BAFEDA member told FE.
Earlier in the day, the country’s top bankers discussed different issues, such as uniform rates for importers, exporters and foreign exchange offices, to stabilize the country’s foreign exchange market.
BB leaders assured key bankers present at the meeting that the central bank would assist the ABB and BAFEDA in this regard, sources said.
The central bank will expand support for the introduction of a “market-based” exchange rate system to help revamp interbank transactions in particular, they added.
Currently, all regular banks set their exchange rates for small and retail transactions, including interbank transactions, in accordance with central bank advice.
However, large corporate transactions are priced according to the much higher procurement costs of overseas remittances – conducted by international exchange houses.
Bankers also advised at the meeting that they are now setting FX sell and buy rates given the new spread in line with BB advice.
On August 14, the central bank asked bankers at a meeting to review the spread between the rate of sale and purchase of the greenback, limiting the margin to Tk 1.0 to help stabilize the country’s foreign exchange market. .
“We discussed making policy decisions for the future,” ABB Chairman Selim RF Hussain told reporters after the meeting. “We also expect the forex market to stabilize in the next two months.”
Meanwhile, the central bank continuously provides the US dollar as foreign currency liquidity support to regular banks to manage volatility in the foreign exchange market.
As part of the ongoing moves, the central bank sold an additional $80 million directly to eight commercial banks on Thursday to help them meet growing demand for the greenback as rising global prices led to escalating costs. imports with its resulting pressures on Bangladesh’s reserves. , as also many other countries. The BB has so far injected $2.76 billion of reserves directly into commercial banks as liquidity support for import payments in the current financial year (FY), 2022-23.
In FY22, the central bank sold $7.62 billion of reserves to banks for the same purpose.
Meanwhile, Bangladesh’s foreign exchange reserves fell further to over $37.0 billion on Thursday after making a routine payment worth $1.73 billion to the Asian Clearing Union (ACU ) against imports made during the July-August period.
Foreign exchange reserves fell to $37.06 billion on the day from $38.99 billion the previous business day, according to the latest BB statistics.
“We have already remitted the funds to the ACU headquarters in Tehran in accordance with the union’s existing arrangements,” a senior BB official told FE.
According to the current provisions, unpaid import bills and interest thereon must be paid by member countries at the end of every two months.
The ACU is an agreement involving Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives, whereby intra-regional transactions between participating central banks are settled on a multilateral basis.
The union began operations in November 1975 to boost trade among member countries. Bangladesh and Myanmar joined the union as the sixth and seventh members in 1976 and 1977 respectively.
Bhutan joined the ACU in December 1999 and the Maldives in January 2010.