The government has taken various initiatives to increase the country’s foreign exchange reserves due to economic instability in the country.
The government has already instructed not to take up new projects without urgency as part of curbing government spending to prevent the dollar crisis in the forex market.
Besides, officials of all government and autonomous banks and financial institutions have been banned from traveling abroad.
On the other hand, Bangladesh Bank (BB) has taken steps to discourage imports of luxury goods. The central bank has also relaxed the conditions for availing 2.5 percent cash incentive for inward remittances over Tk 5,00,000 to encourage expatriates to send more money at home.
Besides, the BB has directed the banks to provide loans at a 4 percent discounted interest rate under subsidy for the cultivation of pulses, oilseeds, spices and maize as alternative crops for import.
Banks have been instructed to disburse loans at concessional interest rates under the government's interest compensation facility to increase production in import-dependent consumer goods countries, save foreign exchange and reduce dollar pressure.
Meanwhile, the National Board of Revenue on Tuesday slapped up to 20 percent regulatory duty on around 135 products as part of the government's broader objectives to discourage imports and contain volatility in the foreign exchange market.
However, the inter-bank exchange rate stood at Tk 87.90 per dollar on Tuesday, up Tk 1.70 or 1.97 percent from Tk 86.20 a month before and Tk 3.10 or 3.65 percent over the same period of the previous year.
As such, the state-owned banks including Sonali and Agrani banks are selling cash dollars at a price of Tk 5.60 more than the interbank rate.
In the open market or curb market, the price of the US dollar surpassed Tk 100 to stand at Tk 104 on 18 May. Now it came down to under Tk 100.
Market analysts said the demand for US dollars rose significantly in the inter-bank foreign exchange market as well as the open market as the country's import demand had picked up recently and the remittance inflow declined as well.
Although the central bank sold US dollars directly to commercial banks to meet higher demand for the greenback, it failed to control the forex market of the country, they added.
The government has taken various time-befitting steps to stabilize the forex market, which will help to reduce pressure on the dollar market, they mentioned.
Bangladesh Bank sold a record dollar worth over US$5.60 billion directly to commercial banks from the foreign exchange reserves to stabilize the forex market during the last 10 and a half months which creased pressure on the foreign exchange reserves.
The country's foreign-exchange reserves on Sunday stood at $42.30 billion, which may cover imports for the next six months.
Bangladesh had a record $48.02 billion foreign-exchange reserves in August last year, sufficient to pay import bills for up to one year, but a steady decline has brought it down to the current level.
Dr Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), said, “The country's economy is under a lot of pressure due to higher imports. Now it must be reduced. Otherwise, we will face a big crisis.”
In this regard, Md Sirajul Islam, Executive Director and spokesperson of the Bangladesh Bank, said, “The price of the dollar has been re-fixed at Tk 87.90. Rising prices of other commodities, including fuel, in the global market and increasing pressure on the country’s imports, have put pressure on the dollar.”
He said that Bangladesh Bank is supplying dollars according to the demand of banks considering the market situation.
More than US$5.60 billion has been sold to banks so far in the current fiscal year, he said, adding that, the central bank provides dollars whenever needed.
Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “The country’s export earnings are increasing. We have to import the necessary raw materials to keep it going. The business entrepreneur advised the government to be strict so that luxury and unnecessary products are not imported now.”
