Bangladesh Bank has raised the maximum inter-bank exchange rate to Tk 110 per USD, up from Tk 109.5, to facilitate the letter of credit (LC) process for commercial banks. This marks the third devaluation of the Taka against the USD this fiscal year, in line with the International Monetary Fund’s recommendation to implement a unified exchange rate. The central bank aims to reduce pressure on USD reserves and establish a unified exchange rate.
Last month (August 2023), the Association of Bankers, Bangladesh Ltd (ABB), and Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) introduced a unified rate, making remittance and export proceeds equal at Tk 109.50, while the import bill and customer dollar sale rate stand at Tk 110. This move follows a 14.50% devaluation of the Taka against the USD since September last year. Commercial banks have faced a USD shortage, impacting LC processes. Despite fixed rates set by BAFEDA, many banks do not comply, creating market instability.