Large exporters in Bangladesh are allegedly not adhering to the exchange rate set for export proceeds and are selling the highly sought-after dollars to importers directly at inflated prices.
Exporters and importers negotiate a dollar rate – around Tk112-113 – between themselves. This is Rs3.5 to Rs4.5 higher than the dollar rate of Rs108.5 by the Bangladesh Foreign Exchange Dealers Association (Bafeda) and the Association of Bankers, Bangladesh (ABB). The exporters are not satisfied with official rates as the dollar rate for remittance is higher than that.
When export proceeds reach the correspondent bank the exporters ask them to sell the dollars at the interbank rate to the bank, which settles bills on their behalf to the importer. Banks are aware of the matter but carry out the process to maintain a relationship with their clients, the officials revealed.
Once the process is done, the importer, as per the agreement, pays the additional Tk3 or Tk4 per dollar separately to the exporter.
An official of one bank revealed that one businessman asked him a few days ago to sell million of export proceeds from his export retention quota account to a second-generation bank.
He said banks have obliged the client given the long-standing relationship with that businessman.
The banks take the hit as they are short of dollars. They buy the dollar proceeds at the official rate and sell dollars to importers at higher prices but the additional amount thus generated is handed over to the exporter.
A senior leader at an association in the garment sector admitted to selling dollars to importers at higher rates and said banks are collecting remittances at higher rates.
Although the central bank set the rate for selling dollars from its reserve at Tk109.50 in line with the interbank rate, market insiders reveal that most banks are opening import letters of credit (LCs) at Tk114-116, disregarding the official rate.
Due to the higher dollar rate in the market, the Bangladesh Bank had to offload .
14 billion from its reserves in July to cover import expenses. This trend has been consistently observed for over a year, indicating a sustained challenge in managing the country’s import costs.
