The taka has continued to depreciate against the US dollar over the last few weeks as the inflow of remittance decreased significantly due to many expatriate Bangladeshis preferring illegal channels to banks while sending money to their relatives, Bangladesh Bank officials said.
The country’s import demand also picked up remarkably in the first five months of the current fiscal year 2016-17 that also played a role in depreciating the taka against the dollar, they said.
The BB data showed that the dollar had appreciated almost every day in the banking channel since January 10 as it was quoted (buy-sales) at Tk 78.99–79 on January 25, up from Tk 78.70–78.70 on January 10 this year.
Besides, on the curb market the rate of the dollar also shot up to Tk 82 in recent days because of a rise in the exchange rate in the banking sector.
The global trend of rising rate of the dollar against all the major currencies like euro and pound has also put an impact on the Bangladesh money market, said a BB official.
The central bank, which had purchased dollars from the banking sector almost every day to stop the slide in the dollar rate in recent months, has not buying dollars since January 4.
Former interim government adviser AB Mirza Azizul Islam told New Age on Thursday that the BB had been trying for long to get a dollar appreciation against the taka in the interest of exporters.
He said, ‘The existing exchange rate between the dollar and the taka is good for the country’s macroeconomic situation. But, the inflation will swell if the local currency depreciates significantly.’
He said that the central bank should take initiative to increase the inflow of inward remittance by checking ‘hundi’ channel.
The BB data showed that the exchange rate between the dollar and the taka remained stable from March 13 to October 26 of 2016 as the greenback was quoted (buy-sales) at Tk 77.40-77.40 during the period.
The exchange rate of the taka, however, was stable again between December 26, 2016 and January 9, 2017.
The inward remittance significantly decreased in 2016 as a good number of expatriate Bangladeshis sent their money by using illegal ‘hundi’ channel that also put an adverse impact on the exchange rate between the dollar and the taka, according to a BB observation.
The country’s inward remittance dropped to a six-year low to $13.61 billion in the just-concluded year as it decreased by 11.13 per cent to $13.61 billion in 2016 compared with that of $15.31 billion in 2015, the BB data showed.
The remittance inflow stood at $14.94 billion in 2014, $13.83 billion in 2013, $14.17 billion in 2012 and $12.16 billion in 2011.
According to the BB paper, NRBs are now using hundi channel to send even small amount of money. They had earlier used the channel to send large amount of money only.
The NRBs in the Gulf countries are now sending their hard-earned money through the hundi channel, but the local agents of the hundi system disburse the money to the relatives of the expatriate Bangladeshis through mobile banking, the paper said.
The BB official said that the country’s import demand increased remarkably in the first five months of this fiscal year, which helped the greenback to get appreciated.
According to the BB data, the import payments posted a 14.58-per cent increase in the July-November period of FY17 against the 2.48-per cent rise registered in the corresponding period of FY16.
Letters of credit involving $19.02 billion were settled in the July-November period of FY17 against LCs worth $17.47 billion settled in the same period a year ago.
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