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The country's foreign exchange market continues to be volatile although the Bangladesh Bank (BB) claims that the demand and supply of the greenback are well matched.
The central bank did not find any reason for continued appreciation of the US dollar against Bangladesh Taka (BDT) in the market.
"We are hopeful about normalcy returning in the inter-bank foreign exchange market shortly," a BB senior official told the FE Wednesday, ruling out its intervention in the market in the near future.
The flow of inward remittances has been satisfactory and export earnings are also reasonable, he observed.
According to the BB statistics, the flow of inward remittances crossed US$ 250 million during the first 16 days of the current month.
However, the US dollar gained further against the local currency and reached Tk 70.85 Wednesday for opening letters of credit (LCs) against imports.
It rose by Tk 0.10 per unit from Monday's high at Tk 70.75 due to short supply of the greenback in the market.
The banks quoted the dollar rate at Tk 67.55-57.60 on the day against Tk 67.40-67.50 of the previous day in the inter-bank foreign exchange market.
The volatility of foreign exchange market is mainly due to unhealthy competition among some banks that has aggravated the short supply of the greenback, competent fund managers said.
"At least four banks are mostly responsible for volatility of the market. These banks are collecting remittances by offering higher rates to the exchange houses aboard. This is an absolutely unhealthy and unethical practice of the commercial banks," a foreign exchange dealer told the FE Wednesday.
The banks are offering higher rates everyday for remittances to increase the flow of greenback and it is one of the reasons for appreciation of the US dollar against the local currency in the market, sources in the banking sector said.
On the other hand, two nationalised commercial banks (NCBs) re-fixed the rate of US dollar at customers' level Wednesday, further in line with the market demand.
The state-owned commercial banks took the move to increase the flow of inward remittances and encourage the exporters by offering better rates for the greenback in the market.
Besides, they have raised the rate of US dollar at customers' level to minimise the gap among the foreign commercial banks (FCBs) and private commercial banks (PCBs), sources in the market said.
The Janata and Agrani banks raised the rate of the greenback at Tk 1.0 at customers' level Wednesday for different sectors like export-import trade, the sources added.
The gap between the rates, quoted by the NCBs, and PCBs and FCBs, is still Tk 0.88 in different areas including the settlement of letters of credit (LCs) despite re-fixing the rate of dollar by the state-owned banks.
The Janata and Agrani banks re-fixed the dollar at Tk 69.97 Wednesday to the importers against Tk 68.97 of the previous day while Sonali Bank sold the greenback at Tk 68.97.
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