TDS Desk:

The dollar price for import LC (Letter of Credit) remained stable at Tk122 as most banks decided to trade at this rate on Thursday (May 15), the second day after the Bangladesh Bank directed banks to implement a market-based exchange rate in line with the condition of the International Monetary Fund (IMF).

The treasury head of commercial banks held an informal meeting today and decided to trade foreign currency at Tk122, according to a source.

However, two state banks purchased remittance at Tk122.50 as they are not concerned about profit, said a treasury head wishing not to be named.

He said the two banks did not receive any verbal instruction about the exchange rate from Bangladesh Bank on the day.

According to bankers, banks have available dollar liquidity as remittance inflow is high ahead of Eid and there they did not observe any foul play from aggregators on the day.

Earlier on Wednesday (May 14), Bangladesh Bank finally announced a shift to a market-based exchange rate system, allowing market participants to trade dollars at freely negotiated rates to get IMF loan confirmation.

However, there will be an undisclosed band within which the exchange rate must stay.

At the same time, the Bangladesh Bank will continue to intervene in the foreign exchange market by buying and selling dollars.

The dollar rate remained between Tk122 and Tk122.50 for a few months and no change was observed even after the implementation of the market-based exchange rate mechanism.

Previously, Bangladesh Bank set a spread of a maximum of Tk1 between buy-sell of foreign currency for market players. However, the provision was repealed through a circular issued on Tuesday (May 13) aiming to implement a market-based exchange rate.