Money changers fix dollar buy-sale rate

Money changers have fixed the cash US dollar buying rate at Tk125.50 and selling rate at Tk126.50, seeking to rein in the open market where the greenback has recently been trading at significantly higher rates.

The new rates were announced on Monday at a meeting of the Money Changers Association of Bangladesh (MCAB) in Dhaka.

MCAB leaders instructed licensed money changers to strictly follow the new rates and refrain from selling dollars above Tk126.50.

The association also urged the authorities to crack down on illegal money traders who, it alleged, were selling dollars at Tk128 or even higher.

MCAB Secretary General Engr Goutam De said the dollar was available in the formal market at around Tk122.48-Tk122.60. Considering the cost of bringing cash dollars into the market and other expenses, the association decided to keep the buying rate at Tk125.50.

He said the Tk1 difference between the buying and selling rates would allow licensed money changers to continue their business while keeping the market within a reasonable range.

The move comes at a time when the gap between the official banking rate and the cash-dollar rate has again become a concern for traders, travellers and remittance-related businesses.

The association said the problem was not being created by most licensed money changers. Rather, illegal operators were pushing up the cash-dollar price and creating confusion among customers.

“Those who are selling dollars at Tk128 or above are not licensed money changers,” Goutam De said, urging the authorities to identify and take action against such operators.

He said around 95 per cent of money changers were doing business honestly and following the rules. The association has already provided the authorities with information about illegal money-changing operators, he said.

The association also raised complaints about banks’ supply of cash dollars.

MCAB leaders said banks often endorse foreign currency for travellers but do not provide enough cash dollars to customers. As a result, many customers turn to the open market to meet their needs, creating additional pressure on the cash-dollar rate.

The association urged Bangladesh Bank to instruct authorised dealer banks to supply licensed money changers with cash dollars according to their legitimate requirements.

The money changers also called for joint monitoring by Bangladesh Bank and the association to check illegal trading and manipulation in the foreign exchange market.

They said stronger monitoring was needed because a small group of illegal operators could create panic in the market and give the entire money-changing sector a bad name.

The association has given the authorities one week to consider its demands. If the situation does not improve, it may announce further action, MCAB leaders said.

The latest decision is also important because the banking market dollar rate remains much lower than the cash rate.

Bangladesh Bank’s indicative rate on Monday was around Tk122.50 per dollar, while the weighted average was about Tk122.53.

The difference shows the continuing premium on physical US dollars in the cash market.

For ordinary customers, the difference matters most when they need dollars for travel, education, medical treatment or other permitted purposes.

MCAB president MS Zaman said they want customers to buy dollars from licensed money changers at transparent rates instead of being forced to depend on illegal operators.

They also said a stable supply of cash dollars through banks and licensed money changers would help reduce unnecessary pressure on the open market.

The association expects the new Tk125.50-Tk126.50 range to bring more discipline to the cash-dollar market, provided the authorities take action against illegal dealers and ensure adequate supply of dollars to licensed operators.