Remittance dollar rate soars as banks compete for overdue payments

The US dollar rate for remittances has risen again by 50 basis points, reaching Tk122.5.

Officials from various banks said that over the past two weeks, the price of the dollar has increased by at least 50 basis points, now standing at Tk122.5 per dollar.

After a brief period of stability in the foreign exchange market, the remittance dollar rate has surged due to mounting pressure from overdue import payments.

Despite this, banks continue to officially display the dollar price at Tk122, as per Bangladesh Bank’s directive.

In late December, the central bank verbally instructed banks to cap the maximum buying and selling rate for remittance dollars at Tk122.

It also mandated that the difference between buying and selling rates must not exceed Tk1, warning of fines for non-compliance.

A senior official of a private bank told UNB that the remittance dollar rate had remained between Tk121.5 and Tk122 in line with central bank’s instructions.

However, with overdue import payments piling up, competition among banks to secure dollars has intensified, leading some banks to purchase remittance dollars at a higher price.

At a meeting on Monday (27 Jan), the central bank directed banks to expedite payments for all overdue import liabilities and back-to-back letters of credit (LCs).

This directive, issued during a meeting of the Authorised Dealers Forum, further escalated dollar demand.

Following this, the remittance dollar rate surged, rising by at least 50 basis points to reach Tk 122.5 per dollar.