Bangladesh Bank has started to monitor on real time basis the exchange rates of major currencies against the local currency taka in a bid to ensure transparency and discipline in the financial sector. As part of the move, the central bank started to publish the exchange rates of the four major global currencies — US dollar, euro, pound starling and Japanese yen — on daily basis against the taka on its web site from Wednesday so that the businesspeople and clients could be informed about the rates of the currencies declared by banks, a BB official told New Age on Thursday.
Banks usually take higher or lower exchange rates of the currencies against the taka than those of their declared rates on the basis of the relationship of clients with banks, the BB official said.
General clients face trouble to buy or sell foreign currencies at banks due to the banks’ dealing on the relationship basis, he said.
From now on, banks cannot practice such type of dealing as the BB has started to publish the rates of major currencies against the taka on daily basis, he said.
The central bank will take punitive measures against banks if they take higher or lower exchange rates of the global currencies against taka violating their declared rates.
The foreign currency market will be more disciplined in the coming days as the central bank will keep an eye on every moment of the exchange rate between taka and major global currencies, another BB official said.
Some banks usually hold more foreign currencies than that of their limit set by the central bank when they guess that the rates of the currencies against the taka will fluctuate, he said.
The central bank sets limit for foreign currency holding by banks time to time considering their business volume mainly export and import position, he said.
But, some banks sometimes hold more foreign currencies violating the central bank-set limit to earn quick profit by selling the currencies, he said.
Due to the central bank’s initiative, banks will not be able to set higher or lower exchange rates of the foreign currencies than that of the weighted average rate in the banking sector against taka, he said.
The central bank buys and sells foreign currency on the basis of the weighted average rate.
The BB sets the weighted average rate of the foreign currencies by calculating the rates set by the scheduled banks.
The BB inspection team will conduct investigation at banks which will take higher or lower rates of the foreign currencies than that of weighted average rate in the banking sector, the central banker said.
-With New Age input
