Dollar surges past Tk 100, but still ‘hard to find’

A day after the Bangladesh Bank devalued the taka against the dollar for the third time in two months to stabilise the currency market, the US currency has shot up further past the Tk 100 mark.

Many of the people who visited the banks and money exchanges in Dhaka for the dollar on Tuesday could not find any as its price on the open market increased by at least Tk 5 to Tk 102, the highest rate in Bangladesh’s history, according to traders in Gulshan, Gulistan, Paltan and Motijheel. Even the banks sold the dollar at Tk 97.

Md Aminuddin, a sales representative of Western Money Exchange at Paltan, said they sold the dollar at Tk 98 in the morning, and bought the currency again at Tk 101 in the afternoon to sell at Tk 102 later.

“As some other businesses ran out of dollar after some more time, we halted trading, because purchasing at a high rate may cause losses. Today the market was difficult to grasp as it rode a roller coaster.”

Jashim Uddin, who trades in dollars on the streets outside the banks of Motijheel, said he had never sent back a customer without providing them with as many dollars as they wanted. “Now I first ask how much they need because the rate is high due to a shortage. I sold at Tk 100 until 3pm and ran out of stocks.”

A man seeking $2,000 from a bank said the bank could not provide him with the dollars. “The price is much higher on the open market. So, I’ll come again [Wednesday],” said the man, requesting anonymity.

The decline of COVID-19 cases was met with a global hike in prices of commodities as the Russia-Ukraine war caused the supply and delivery costs to go up. As a result, the demand for dollars rose and the Bangladeshi taka, like many other currencies in the world, began losing value.

On the open market, expatriate workers and tourists are the chief sources of dollars. They sell off the dollar they have on them to money exchanges, which in turn sell off the cash to overseas travellers who need it.

Now the money exchanges do not get much foreign currencies from expatriates and tourists while the number of people going abroad for travel, shopping, education, medical treatment and other causes has increased.

“More people come to buy dollars now. We'd seen foreigners earlier, but they have vanished. Moreover, it is possible to shop with cards, so the use of dollar notes is falling” said Golam Faruk, a worker of Margina Money Exchange in Gulshan.

The US dollar exchange rate for interbank transactions was revised down by Tk 0.80 to Tk 87.5 on Tuesday, but several banks hiked dollar prices to around Tk 92-94 amid heightened demand.

On Tuesday, Eastern Bank Limited sold the dollar at Tk 96, up from Tk 92.5 on Monday. Social Islami Bank raised dollar price by Tk 3.5 to Tk 99 in a day.

On the global market, the dollar eased for a third straight day on Tuesday, pulling back from a two-decade high against a basket of major peers, as an uptick in investors' appetite for riskier bets diminished the US currency's safe-haven appeal, Reuters reported.

The US Dollar Currency Index =USD, which tracks the greenback against six major currencies, was down 0.7 percent at 103.39, its lowest since May 6. The index hit a two-decade high last week supported by a hawkish Federal Reserve and worries over the global economic fallout from the Russia-Ukraine conflict.

The dollar remained subdued after data showed US retail sales increased solidly in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants, showing no signs of demand letting up despite high inflation.