Don't buy USD from remitters at over Tk 116

Bangladesh Bank yesterday directed banks not to buy US dollars from remitters by paying more than Tk 116.

The directive came at a meeting with chief executives of banks, a day after the Bangladesh Foreign Exchange Dealers' Association (BAFEDA) and the Association of Bankers' Bangladesh (ABB) asked bankers to avoid paying over Tk 115-Tk 116 to buy a dollar from migrant workers.

The rate includes the 2.5 percent incentive offered by the government and the perks given by banks from their own coffer with a view to encouraging migrants to transfer funds through banks instead of informal agents.

A chief executive who attended the meeting said the dollar buying rate can't be higher than the price fixed by the ABB-BAFEDA.

At the meeting, the BB also asked banks to sell 10 percent of their last month's US dollar holdings, mobilised in the form of remittance, in the interbank foreign exchange market, he said.

Another top official of a private bank said the central bank warned that it would take regulatory measures if banks bypass the ABB-BAFEDA rates.

The dollar market saw fresh volatility last week as some banks offered as much as Tk 124 for a greenback to bring in remittances and overcome the shortage of the currency.