The Bangladeshi taka continues to depreciate against the U.S. dollar, increasing the financial burden on businesses and impacting the economy. Today, the interbank exchange rate is 111 taka to the dollar, with some banks receiving remittances at rates as high as 117 taka to the dollar and open market trading at 121 taka to the dollar. This has led to increased import costs and difficulties in obtaining foreign currency.
In an attempt to counter this trend, the Bangladesh Foreign Exchange Dealers Association (BAFEDA) and the Association of Bankers, Bangladesh (ABB (ST:ABB)) allowed a 2.5% higher dollar purchase rate from remitters on October 22. However, as the taka continued to depreciate, these bodies increased the dollar purchase rate from exporters to Tk 110.5 on October 31 and enforced regulatory checks on bank records.
Despite these measures, allegations of inflated rates and dollar shortages led the banking authorities to cap the exchange rate at Tk 115 per US dollar for transactions by Bangladeshi workers abroad on November 7. This came despite earlier offers of up to Tk 124.
The current crisis in the foreign exchange market is further exacerbated by a 4.3% year-on-year decline in remittance inflows to $6.8 billion in July-October 2023-24, despite government incentives for remitters. Over the past 27 months, the central bank‘s sale of over $25 billion from its reserves to stabilize the foreign exchange market has failed to offset the sluggish inflow of remittances and export earnings, leading to a depletion of foreign exchange reserves.
From September 2021 to September 2022, the taka depreciated from 85.5 taka to the dollar to 96 taka to the dollar in the midst of a dollar crisis and dollar supply and demand mismatch. This depreciation escalated the debt repayment obligations on the U.S.-denominated external debt, leading to further economic repercussions.