Dhaka : Bangladesh Bank devalued the local currency against United States dollar by BDT 1.10 on May 29, the highest devaluation in a single day recently, with an inter-bank exchange rate of BDT 89, effective from May 30.
Earlier, the inter-bank exchange rate was BDT 87.90 per dollar.
Bangladesh Bank devalued taka after the Bangladesh Foreign Exchange Dealers Association (BAFEDA) proposed setting the rate at BDT 89.80 on May 29.
The central bank devalued taka by 4.7 per cent in the last 11 months from July last year when the inter-bank transaction rate was BDT 84.8 each dollar.
The regulator also set the import LC (Letter of Credit) settlement rate at BDT 89.15, raising it from the current rate of BDT 88. The BAFEDA had proposed setting it to BDT 89.95.
Earlier on May 26, Bangladesh Bank held a meeting with the top leaders of Association of Bankers, Bangladesh (ABB) and BAFEDA to find a solution to the current dollar rate volatility.
In the meeting, both platforms were asked to propose rates to the Bangladesh Bank to set a uniform rate for all banks.
However, according to reports, several bank officials claimed that the new rates will be ineffective because the dollar balance is not the same in all banks. Some large banks have higher income from exports and inward remittances, compared to most medium-sized and small banks. In this context, if all banks offer a uniform rate to exporters and remitters, only the large banks will be the gainers.
Also, remittance earnings have already fallen drastically in some big banks despite having good facilities because of the high difference between official and unofficial rates. In this situation, the rate below BDT 90 for remitters and exporters will not be effective, stated reports citing bank officials.
According to Bangladesh Bank's data, Islami Bank held 22.33 per cent of the total remittance earnings which came through the banking channel in the January-March quarter of the current year.
The Dutch-Bangla Bank accounted for the second-highest 12 per cent share in total remittance earnings. The other good remittance-earning banks are Agrani Bank, Sonali Bank, Bank Asia, Southeast Bank, Pubali Bank, Mutual Trust Bank, Janata Bank, and The City Bank.
Other banks collectively held a 30.66 per cent share of total inward remittance.
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