The Bangladesh Bank sealed off seven unlicensed money changers for manipulating the US dollar exchange rates, according to an official report.
On 27 and 28 September, the central bank and the Directorate General of National Security Intelligence shuttered the money exchange houses after separate raids.
The money changers are – Nightingale Money Exchange, KMC Money Exchange, Megacity Money Exchange, Sheikh Money Exchange, Khan & Chowdhury Money Exchange, AJ Money Exchange and Quick Money Exchange, shows a report of the central bank.
Central bank sources said they cracked down on 24 money changers in the two days. Following the raids, traders of many unauthorised money exchange houses fled, as some shops down pulled the shutters to avert legal actions.
At present, 235 money changers have the central bank's approval. But more than 700 houses are buying and selling currencies in the kerb market, according to sources.
Earlier, the central bank suspended the licences of five money changers and served notice on 42 others, citing alleged manipulation of the exchange rate. Besides, law enforcers were asked to take action against nine other unlicensed houses.
A depleting forex reserve and winding down remittance inflow prompted a US dollar crunch at banks in April this year. On 12 July, the greenback shot up Tk100 in the kerb market for the first time.
After maintaining a gradual rise subsequently, the open market rate skyrocketed to Tk120 on 10 August – compelling the crackdown on money changers to check the market manipulation.
In the last week of August, the Bangladesh Financial Intelligence Unit asked 28 money changers to submit their bank statements on suspicion of money laundering.
Bangladesh Bank Executive Director and Spokesperson Sirajul Islam said the central bank will continue the crackdown.
"If any money changer is found involved in market manipulation, its licence will be revoked," he told The Business Standard.
On Monday, the US dollar was at Tk110 in the kerb market. The rate was Tk105.20 in interbank exchange as the central bank sold dollars at Tk96 for public imports.
On 11 August, the central bank said regular bank branches will be allowed to trade dollars so that the dependency on the kerb market reduces. The banks were asked to apply with the central bank to get their branch offices approved for the cash dollar sales. The central bank says 1,822 branch offices have taken the approval so far.
According to law, if a money changer has more than $25,000 in its pocket after the daily trading, it must deposit the extra amount to the bank. Besides, the money exchange houses must update the central bank about the trade details regularly.