The Association of Bankers, Bangladesh (ABB) and the Bangladesh Foreign Exchange Dealers Association (BAFEDA) have urged Bangladesh Bank Governor Fazle Kabir to increase dollar supply to ease the existing foreign currency crisis caused by soaring trade deficit and declining inflow of remittance.
In a meeting with the governor on Sunday, the banks agreed to work together to help the central bank increase dollar supply, which, they said, will ultimately bring down its price to the normal level.
"In the meeting, the dollar supply situation and several other issues were discussed. The bankers requested us to increase dollar supply and we also talked about how we can receive due payments from foreign entities fast," Sirajul Islam, executive director and spokesperson of the central bank, told The Business Standard.
There was no discussion on dollar rates, he added.
Talking to TBS, several participants said reducing the demand for the dollar is not possible in the current situation.
"We discussed the easy ways of recompiling dollars of nostro accounts [that local banks hold in foreign currency in other banks] and ways to use dollars from offshore banking in onshore banking by formulating a policy," said a participant, wishing to remain unnamed.
On Sunday, the interbank dollar exchange rate was at Tk92; the rate was Tk91.95 last Monday.
The foreign exchange reserves stood at $41.7 billion last week. It was $48 billion in August last year. The central bank has so far sold about $7 billion worth dollars to banks in the ongoing fiscal year.
The country's trade deficit hit a historic high of $27.56 billion in the first 10 months of the current fiscal year, with high import expenditures and low export earnings, according to the Bangladesh Bank.
Meanwhile, money sent home by expatriate Bangladeshis fell by around 13% year-on-year to $1.88 billion in May, it said. The amount was $2.01 billion in April this year, which means the May remittance inflow fell by 6.23% from the previous month.
In the 11 months of the current fiscal year (July-May), the country received $19.19 billion as remittances, 15.94% lower year-on-year.