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Private banks play foul with dollar price

Bangladesh, Bangladesh Bank, Dollar, Dutch Bangla Bank, Brac Bank, City Bank, Prime Bank, Southeast Bank, Standard Chartered Bank

Economy

Private banks play foul with dollar price

While the government is making sincerest efforts in forex market stable, several private banks are playing foul with the current situation and making huge profit everyday through numerous manipulative actions. While there is strict rule for the banks of maintaining a limit of forex reserve, most of the private banks are not paying any heed to it and been engaged in illegally building huge reserve of foreign exchange with the ulterior goal of making high profits.

On August 8, the Bangladesh Bank ordered the removal of treasury chiefs of six banks after finding evidence against them of making higher profits in trading dollars.

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According to Bangladesh Bank sources, the banks include Dutch Bangla Bank, Brac Bank, City Bank, Prime Bank, Southeast Bank and multinational Standard Chartered Bank.

The Bangladesh Bank sent letters to the six banks, asking them to transfer their treasury chiefs.

Bangladesh Bank officials told reporters, the treasury chiefs helped their employers make excessive profits by cashing in on the ongoing volatility in the foreign currency regime, which saw the exchange rate of US dollar shoot past BDT 110 amid a shortage of greenback.

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A bank’s treasury department focuses on liquidity management in both local and foreign currencies as well as asset and liability management.

Seeking anonymity, a Bangladesh Bank official said the banks purchased US dollars from exporters at a lower rate but sold them at a much higher rate to importers.

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Banks in the country have to sell and buy dollars based on the inter-bank exchange rate of the USD set by the central bank.

As per the banking norms, lenders are allowed to offer BDT 1 less from the interbank rate while buying dollars from exporters. They can sell greenback, adding BDT 1 to the interbank rate.

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The BB move comes as the volatility in the foreign exchange market shows no sign of slowing down though the BB has already taken a set of measures amid fast-depleting international currency reserves.

Recently Finance Minister AHM Mustafa Kamal told reporters, the minister said that the dollar rate is now at an unstable state everywhere in the
world and those who are engaged in war and who are provoking the war are also facing the same consequences.

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“We are trying to keep the forex market stable and hopefully it will come to normalcy”, he added.

Replying to a query about the removal of treasury chiefs of six banks, Kamal said that there is a limit for keeping dollars at banks.

“If any bank violates the rules, it should get punishment”, he added.

Despite initiatives of the Finance Ministry of Bangladesh Bank, it is alleged that dozens of owners of private bank (in addition to Dutch Bangla Bank, Brac Bank, City Bank, Prime Bank, and Southeast Bank) are buying millions of dollars by using their banks and later selling at an exorbitant price. Such bullish activities of those bank owners and officials also is having negative impact on the instability of dollar price in the market.

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Contents published under this byline are those created by the news team of BLiTZ

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