The dollar has done it again — and this time, it’s dancing on the nerves of Bangladesh’s business community. After months of calm, the foreign exchange market has erupted in sudden turbulence, leaving importers gasping for air and bankers pretending to be innocent spectators.As of yesterday, commercial banks were selling U.S. dollars at up to Tk 122.75 each — just three working days ago, it was hovering around Tk 122.00 to Tk 122.30. That may sound like a minor change to the untrained ear, but for traders who import raw materials by the shipload, it’s a nightmare measured in millions.“Banks have turned currency into a casino,” fumed a Chattogram-based business executive, accusing financial institutions of jacking up rates to squeeze extra profit before the year ends. “Every December, they play the same game — inflate the dollar rate, boost profit sheets, and let us foot the bill.”
Bankers, of course, deny everything. “No manipulation — just market-based pricing,” insisted one treasury official, straight-faced. “We’re simply following Bangladesh Bank’s new exchange-rate policy.”
Ah yes, the new policy. Since May, under the International Monetary Fund’s reform mandate, Bangladesh has adopted a so-called market-driven dollar rate. In theory, this was meant to end artificial control. In practice, it has unleashed the wild instincts of profit-hungry bankers.
Officials at Bangladesh Bank (BB) claim the recent spike is “temporary.” Assistant spokesperson Md. Shahriar Siddiqui told the People, “Government payments have increased short-term demand for dollars. The price will stabilize soon.”
Perhaps — but in the meantime, importers are bleeding. With every 50 paisa rise in the exchange rate, import costs shoot up, production becomes pricier, and inflation gets another kick.
Even exporters, who normally cheer for a weaker taka, are now uneasy. “This isn’t real market behavior,” said Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). “When dollar prices rise artificially, the whole economy pays the price. Import costs go up, inflation rises, and production suffers. The dollar must stabilize — or the economy will spin out of control.”
At the interbank level, yesterday’s maximum dollar rate stood at Tk 122.25, up from Tk 122.00 the day before — a modest 25 paisa jump that hints at deeper tremors.
Meanwhile, Bangladesh Bank itself seems to be quietly fanning the flames. Data shows that in this fiscal year alone, the central bank has bought $2.12 billion from the market — including $38 million last week at Tk 121.80 per dollar. That’s right: the regulator is both referee and player.
Add to that the surge in import activity — letters of credit (LCs) opened in September reached $6.3 billion, up from $5.38 billion in August, a sharp 17% monthly jump — and it’s clear why the greenback has found fresh wind beneath its wings.
Yet skeptics remain unconvinced. “There’s no real pressure,” said another importer, his tone dripping with sarcasm. “Only pressure to show fat profits before year-end. If this keeps up, we might as well invoice in onions and potatoes instead of dollars.”
In short, Bangladesh’s dollar market has once again turned into a theater of irony — where the bankers quote IMF reforms, traders quote losses, and the taka quietly quotes its own obituary.