Banks offer a fee as low as TK120 for Thursday’s remittance dollars
July 13th, 2025, 12:30am
Last revised: July 13th, 2025, 1:19pm
Infographic: TBS
The US dollar has seen a notable decline against the taka over the past week, dropping around TK2.90. This fall, combined with strong remittance inflows and export activity, suggests a decreased demand for dollars in the market.
On Thursday, banks reported a fee of TK120 for remittance dollars, though some indicated purchases were occurring at TK120.50. Nonetheless, forex houses selling these dollars stated that initially on Thursday, rates were higher, with fees ranging from 20 to 50. By the end of the day, banks weren’t offering TK120 or more. Just last week, the rate for remittance dollars was around TK122.80-122.90.
Syed Mahbubur Rahman, CEO of Mutual Trust Bank, commented that banks are experiencing a drop in dollar demand. “As rates decline, many banks are hesitant to retain dollars and are looking to sell,” he noted.
Mahbubur further mentioned that the increased dollar availability can be attributed to slower openings for import letters (LCs) as well as robust remittance and export inflows.
A representative from a Forex House expressed frustration about the challenges in selling dollars to banks. “Banks used to call us for dollars, and we struggled to meet that demand. Last week, that dynamic shifted,” he explained.
This individual recounted an offer to sell $10 million to a bank; however, due to rapport, the bank was only interested in $1 million. If this trend persists, he believes the dollar price could fall even lower.
Another bank assistant managing director relayed a similar scenario, saying that an exchange offered to buy $5 million in remittance dollars at TK120.80 on Thursday, but he declined, hoping for even lower prices. “Purchasing dollars at a high rate now could mean losses later,” he argued.
The dollar market has been erratic since last December when the exchange rate hit high points of TK128 on two occasions within just two business days. The central bank’s intervention subsequently reduced the dollar price.
Durning that time, the bank governor, Ahsan H. Mansoor, highlighted market volatility due to certain banks’ actions. He also pointed out that forex aggregators were inflating dollar prices, a situation he described as “unacceptable.”
Then, in mid-May, Bangladesh officially shifted to a market-based exchange rate system, permitting free trade of dollars according to terms established by the IMF. Since that adjustment, the dollar price has generally trended downward.
Will the dollar price drop even further?
In recent years, demand has consistently outstripped supply in the Bangladeshi dollar market, primarily due to a backlog in government import payments. This pressure from state-owned banks, which needed dollars to clear these payments, has been significant. As dollar prices increased, so did market pressures as companies sought to settle these outstanding payments quickly.
A deputy managing director at a major private bank noted that the current drop in demand from state-owned banks has been pivotal in the recent price decline. “After Governor Mansoor took over, he prioritized settling government import payment backlogs. But rather than using reserves, he urged state-owned banks to source dollars directly from the market,” he explained.
Consequently, these banks have purchased substantial amounts—occasionally up to $1 billion per month—allowing them to resolve most expired payments and leading to a current lack of demand from those banks.
Another bank managing director observed, “Investment levels are low. With reduced investment, imports for capital machinery and raw materials will also decline. Right now, imports mostly consist of essential goods, which typically remain stable.”
He added, “We don’t anticipate a swift rise in dollar demand. However, remittance inflows remain strong, and export prices are stable. Overall, there’s a good supply of dollars. Therefore, dollar prices might continue to fall in the near future.”
That said, bankers did caution that if the central bank starts purchasing dollars from the market, it could disrupt the current pricing trend, potentially causing a slight increase.
