Home Jersey sale Quickly Convert Export Earnings into Taka: Bangladesh Bank to Banks

Quickly Convert Export Earnings into Taka: Bangladesh Bank to Banks

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Banks recently alleged that many exporters failed to convert their dollars into taka because the local currency had weakened significantly.

The Bangladesh Bank has asked banks to immediately convert major export earnings from businesses into taka as it seeks to increase the supply of US dollars in the economy.

The rule will apply to the value added portion of export earnings. The value added portion refers to export earnings that are available to exporters once their import bills for back-to-back letters of credit have been settled.

“It is observed that the value-added part is not cashed in taka immediately upon repatriation of export earnings, resulting in delayed cash support to exporters to meet working capital requirements in taka” , the central bank said in a notice yesterday.

Banks recently alleged that many exporters failed to convert their dollars into taka because the local currency had weakened significantly.

Exporters believed they would benefit more if US dollars were not converted immediately, worsening the currency crisis.

The BB’s latest measure came after foreign exchange reserves fell to $42.29 billion on May 25 from $46.15 billion in December, driven by higher imports against subdued exports and remittance flows. lower funds.

In Bangladesh, banks are allowed to keep repatriated export earnings in a foreign currency in a single pool after receipt of the local value added share. These funds can only be used for the settlement of back-to-back import payments from relative exporters.

Retention of export earnings in foreign currencies allows exporters to settle back-to-back liabilities without incurring exchange losses.

In another notice, the BB said exporters should sell their export earnings to the banks through which they ship goods.

Many exporters sell their export earnings to banks that offer the highest rate. Yesterday’s instruction will end the practice.

This has created a scenario of indiscipline in the forex market.

Many banks have recently offered 95 to 97 taka per dollar to exporters. In context, they opted for lenders who offered a higher price.

The move will bring stability to the market, a BB official said.