Dollar rate is very high in the curb market beyond thought as the rumor goes Tk 500 and Tk 1,000 notes may be banned, market analysts said. Apart from this, following the ongoing drive against illegal casino, tender manipulators and drug peddlers, most people involved in such illegal activities, have started purchasing dollars in order to save their money, they added.
And they are converting cash money into dollars to avert arrest and be ready to go abroad, sources said. On the other hand, the foreign exchange market has recently faced a huge pressure of greenback, as import payment has significantly increased compare with export earnings which pushed dollar crisis in the market.
However, the US dollar appreciated by more than one Taka within a week to stand almost Tk 86.60-Tk 87.30 on Sunday against local currency Taka in the curb market. Taking to many exchange houses, they said, dollar rate has recently increased rapidly as dollar demand has increased against supply in the market which resulted the greenback rate rising.
The demand-supply mismatch of the US dollar in the market is the main cause behind the rising trend of cash dollar rates, they added. They said, most of the clients brought the US dollar to go abroad for visiting, medical treatments, education and business purposes. However, the rate of cash US dollar normally increases in the market when illegal transactions like smuggling and under-invoicing go up, a senior official of commercial bank told Bangladesh Post seeking anonymity.
He said the central bank should take some steps to control this situation as early as possible. The central bank spokesman Sirajul Islam said, Bangladesh Bank (BB) will not ban denominations of Tk 1, 000, and tk 500, it is rumor. The central bank in a circular issued On Thursday has called on the people not to be confused by the propaganda that Tk1,000, and 500 notes will be banned, and withdrawn from the market.
“Neither the BB has taken any such decision, nor has the government issued any directive in this regard,” he said. According to the 1972 BB Order, the central bank is the sole authority to issue, and ban any notes of any denomination. The Bangladesh bank also urged the print, and electronic media not to publish or broadcast any propaganda relating to banning of taka 1,000, and 500 notes.
Such propaganda goes against the law, it says. Islami Bank treasury head Nazrul Islam told Bangladesh Post that, “The dollar did not increase due to as the rumor goes Tk 500 and Tk 1,000 notes may be banned.” He said, now the foreign exchange market is facing a huge demand of greenback is not only for higher import payment but also for meeting others especially these people who go abroad for various purposes.
Although the interbank foreign exchange rate has unchanged in the last five months against Taka as the central bank sold US dollar directly to commercial banks to meet higher import payment. The US dollar was quoted at Tk 84.50 on Sunday. Eminent economist and former BB governor Dr Salehuddin Ahmed told Bangladesh Post the foreign exchange market has recently faced dollar crisis due to increased import pressure.
The central bank should not intervene by selling US dollar in the foreign exchange market all the time, Ahmed said, adding that the strong dollar rate against taka will encourage expatriates to send more remittance home side by side helping to get higher export earnings for traders. In this case, the government should find out proper indicatives how remittance and export can be increased side by side unnecessary imports can be reduced, he added.
