Dhaka, Bangladesh (BBN) - Country’s top bankers sit Monday evening to review the overall foreign exchange market situation after the central bank warned of intervention if the dealers fail to maintain a benchmark for dealing with overseas exchange houses.
The "special" meeting is convened as the Bangladesh Bank has raised its concern over continuous weakening of Bangladesh Taka (BDT) against the US currency, saying some banks are contributing to the situation by engaging in unhealthy practices.
Market insiders said some banks are quoting high rates to the overseas exchange houses to attract more remittance and these rates often exceeded the local inter-bank foreign exchange market by a wide margin.
The Bangladesh Foreign Exchange Dealers' Association (BAFEDA), a grouping of 45 commercial banks which trade forex in the local market, is hosting the meet to discuss the latest situation, a BAFEDA member said.
"We'll talk about the BB instructions in this special meeting and try to find ways to set benchmark rates for doing business with the foreign exchange houses," the member added.
The BAFEDA has earlier asked all its member banks that while dealing with these exchange houses they should keep the quotes at least BDT 0.20 lower than the inter-bank buying and selling average unit rate.
The apex body of the foreign exchange-dealer banks had set the benchmark rate to ensure healthy competition in the forex market, according to the BAFEDA member.
"We'll submit a report in this connection to the central bank by October 12 this year in line with the central bank’s verbal directives on Wednesday," he added.
BBN/SSR/AD-10Oct11-2:34 pm (BST)