Dhaka, Bangladesh (BBN) - The exchange rate of US dollar in the open market, known as kerb market, hit BDT 78.00 on Thursday ahead of the upcoming Eid-ul-Fitr.
The US currency has reached its maximum rate at BDT 78 as the demand for the greenback increased substantially to meet the growing demand of the outbound passengers, currency traders said.
A section of people with their family are flying aboard to celebrate the Eid festival. This has pushed the exchange rate of US currency to a maximum of BDT 78 in the kerb market.
"Different professionals including businessmen are flying to the South and East Asian countries including India, Nepal, Bhutan, Thailand, Malaysia and Singapore to celebrate the Eid festival," a currency trader was quoted by the Financial Express (FE), a local newspaper, as saying.
They will enjoy the Eid festival aboard with their near and dear ones during five-day-long Eid holidays, he added.
The trader said that the exchange rate of the greenback shot up to BDT 78.00 by the end of last week from that of below BDT 77.00 a couple of days back.
The greenback was sold between BDT 77.50 and BDT 78.00 in the kerb market on Thursday, while the buying rates were between BDT 76.50 and BDT 77.00.
The flow of cash dollar to the kerb market is being affected due to supply-side constraints, although the demand for greenback has remained unchanged, market insiders said.
Besides, the tough anti-money laundering act has been discouraging the expatriate Bangladeshis from sending their hard-earned money through illegal 'hundi' channel.
The rate of US dollar normally increases in the kerb markets when substantial illegal transactions like smuggling and under- and over-invoicing take place, they added.
The US dollar sold in the kerb market last Thursday at a level which was higher by nearly BDT 3.0 than what was offered by the state-owned banks.
In the formal market, five state-owned banks were selling the greenback at BDT 75.15 and buying at BDT 74.15 last Thursday, a senior private banker said, adding that most private and foreign commercial banks offer higher rates for the greenback than that of the state-owned banks.
The central bank is closely monitoring the market situation but it cannot intervene directly in the kerb market.
"We're informed about the higher rates of the greenback in the kerb market," a senior official of the Bangladesh Bank (BB) said, adding that the central bank is closely watching the situation.
He also said the exchange rate of the greenback against the local currency may ease in the kerb market after the Eid festival.
BBN/SSR/AD-29Aug11-10:18 am (BST)