Dhaka, Bangladesh (BBN) – The banks were requested Sunday to maintain a benchmark for quoting foreign currency exchange rates to the overseas exchange houses engaged in remitting money to Bangladesh, bankers said.
The decision came at a meeting of the executive committee of the Bangladesh Foreign Exchange Dealers’ Association (BAFEDA), held at its office in Dhaka on the day with its Chairman Syed Abu Naser Bukhtear Ahmed in the chair.
Under the decision, the exchange rate for overseas exchange houses to be quoted by the banks will be inter-bank buying and selling average rate (mid rate) less by BDT 0.20 per U.S. dollar.
The country’s apex body of the foreign exchange dealer banks took the latest move aiming to ensure a healthy competitive atmosphere in the country’s foreign exchange market.
Currently, some commercial banks are quoting unusually high rates to the overseas exchange houses to attract more inward remittances and these rates often exceeded the inter-bank foreign exchange market rates.
“We want a healthy competition in the inter-bank foreign exchange market and like to see that all banks are following international best practices,” BAFEDA Chairman Syed Abu Naser Bukhtear Ahmed told BBN in the capital, Dhaka after the meeting.
Mr Bukhtear, who is also Managing Director and Chief Executive Officer of the Agrani Bank Limited, said such unhealthy competition neither benefits the remitters nor the beneficiaries in Bangladesh.
The meeting also decided that the BAFEDA would monitor the rate, offered by the commercial banks to the overseas exchange houses, using their own mechanism, a senior treasury official said.
The treasury official also said some banks are quoting exchange rates prepared by their remittance departments to the overseas exchange houses rather than relying on the treasury rates. But the remittance departments are neither equipped nor empowered to quote such rates, he added.
The meeting also decided that third-party banks might provide the foreign currency as desired by the importers against underlying transactions.
The BAFEDA also urged the banks to make sure the payment of unpaid export bills on maturity in line with the existing foreign exchange rules and regulations.
Currently 44 banks out of 48 are members of the BAFEDA.
BBN/SS/SI/AD-29June09-12:26 am (BST)