The Bangladesh Bank has resumed selling dollars on the country’s financial market due to a shortage of the greenbacks and a rise in the dollar rate as the country’s export and remittance earnings slumped amid the global coronavirus pandemic.
The coronavirus outbreak in most of the countries of the globe has left a large number of migrant workers jobless and resulted in cancellations of export orders.
In March, the country’s exports and remittance earnings dropped by 18.29 per cent and 11.83 per cent respectively due to the jolt in the global economy after the outbreak began in China.
In the first 13 days of April, remittance inflow dropped to $332 million from $518 million in the same period of last year.
Bankers said that the situation might worsen as many of the countries including Saudi Arabia, Kuwait and the United Arab Emirates remained locked down due to the coronavirus outbreak.
With the growing figures of coronavirus infected and casualty in the country, the Bangladesh government has taken a number of measures to contain the spread of coronavirus, leaving the country’s economy to a freezing state.
Taking the demand-supply situation of dollars in consideration, the BB has started selling the US dollars from April 2 and has already sold around $140 million to the local banks as lower dollar supply has resulted in appreciation of the greenback against the taka, said officials of the central bank.
BB official said that the central bank had purchased $305 million from the local market from March 9 to March 19 this year. The central bank didn’t make any buy-sale move between March 20 and April 1.
Before March 9, the central bank had been injecting dollars in the market since January, 2017.
Bankers said that the central bank should increase supply of the greenbacks in the market to contain the exchange rate of the dollar.
The dollar sales move of the BB came within a month it had started buying dollars from the local market as it witnessed appreciation of the taka against the dollar due to the surge in remittance inflow and fall in import of raw materials.
Although the inter-bank exchange rate of the dollar was Tk 84.95 in April, a number of banks were clearing import payments at as high as Tk 87.5 thus contributing to the price hike of the imported goods.
Prime Bank managing director and chief executive officer Rahel Ahmed told New Age that the supply of dollars had dropped in the banking sector recently due mainly to the fall in remittance earnings and export earrings.
On the other hand, the banks were clearing payments against the import of different commodities as committed earlier, Rahel said.
The payments against the import of fuel by the Bangladesh Petroleum Corporation make a significant amount of the total payments, he mentioned.
Besides, the import of a number of items usually increases ahead of Ramadan, the month of fasting for the Muslims, because of a surge in demand for those items, he said.
‘Because of the demand and supply situation, most of the banks are executing payments at a bit higher rate than the interbank exchange rate of the dollar,’ Rahel said.
Under the circumstances, the central bank should increase dollar sales a bit, he said, adding that the increase in dollar sales by the BB would help keep the dollar price at a reasonable level and that would contribute to keeping the prices of commodities reasonable.
So far, the BB sold around $629 million (including around $140 million) to the local market till Monday of the current fiscal year after selling $2.34 billion in FY19.
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