BB moves to cut dollar's spread at customer level

FT ONLINE

The central bank has started a process to reduce the spread between selling and buying rates of the US dollar at the customer level to the benefit of exporters and remitters, officials said.

As part of the move, 10 leading commercial banks were asked on Sunday to report in writing in a couple of days, if they face any problem with the reduction of the spread.

The instruction was made at a meeting of the senior executives of the banks, held at the Bangladesh Bank (BB) headquarters in Dhaka on the day with its General Manager Kazi Rafiqul Hassan in the chair.

"We want to revisit the gap between BC (bill for collection) Selling and TT (telegraphic transfer) Clean considering different cost factors for fixing such rates," a senior official of the Bangladesh Bank (BB) said.

He also said the central bank will also examine the spread between the BC Selling and TT Clean of the neighbouring countries including India, Pakistan and Sri Lanka.

Currently, the banks are allowed to maintain around BDT 1.0 spread between the BC Selling and TT Clean.

"We've informed the meeting of different costs including holding and operational costs for fixing the rates," a senior executive of a leading private commercial bank (PCB) said after the meeting.

Actually, the spread is lower than that of the official announcement in consideration of the higher rates, offered by some banks to the exchange houses abroad, to boost inflow of remittances, the senior banker explained.

The central bank has taken the latest move to revisit the spread after more than 12 years.

Earlier on March 25, 2007, the Bangladesh Foreign Exchange Dealers' Association (BAFEDA) recommended maintaining the spread of rates within a maximum of Tk 1.0 for the BC Selling and TT Clean.

The BAFEDA took the decision in line with the BB's directive, according to a senior private banker.

On the other hand, the spread between the inter-bank rate and the BC Selling is now only five poisha.

The US currency was quoted at Tk 84.80 in the market on Sunday, unchanged from the previous level, according to market operators.

The exchange rate of the local currency remained unchanged against the US dollar at the customer level for settling import payment obligations.

The exchange rate of the US dollar was quoted at a maximum of Tk 84.85 for the BC Selling on Sunday unchanged from the previous level.