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Dollar crisis leads to backlog of import payment

By Special Correspondent
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Most of the banks are reportedly struggling to settle their import payment obligations due to dollar crisis in the forex market, caused by sudden boom in imports.
This has also caused of dollar by nearly 3.0 percent in terms of value of local currency in the first nine months (July-March) of this fiscal. The interbank exchange rate stood at Tk 83.50 per dollar on Wednesday, up from Tk 78.70 a year ago.
The central bank has already auctioned US$1.8 billion on the forward market since July of this fiscal to clear backlog of import payment and stabilize the foreign currency market.
But such effort fell short to salvage the situation with commercial banks continuing to face dollar shortages deepening the crisis further.
"We're facing huge difficulty to clear backlog of import payment due to dollar crisis. The persistent external deficit has created the situation," Chief Executive Officer (CEO) of a public bank   told The New Nation on Wednesday, asking not to be named.
He said, banks are struggling to arrange required dollar from interbank exchange market even offering high rates. It is a good news for foreign exchange dealers, who have a higher reserve of dollar.   
The banker urged the government to take import control measures to ensure adequate flow of dollars in to the market and the maintenance of the official exchange rate.
The US dollar is the world's dominant reserve currency and the main medium of international trade. The interbank exchange rate stood at Tk 83.50 per dollar, up from Tk 78.70 a year ago.
Admitting the crisis, Ataur Rahman Pradhan, CEO of Rupali Bank said, "The central bank should tighten control on the banks which held high dollar reserve. Steps should be taken to lower their reserve to overcome the current crisis."
He said the crisis has led to a sharp fall in the value of local currency pushing up the cost of imports and inflation. "Strong dollar pushed up the import cost and consequently it will make the imported goods costlier."
"The central bank is closely monitoring the development of the forex market. To keep the situation under control, it continues to sell dollar to the banks regularly," Debashish Chakraborty, an Executive Director and Central Bank's spokesperson, told The New Nation.
"Rising import is mainly responsible for dollar crisis," he said.
According to Bangladesh Bank (BB), import increased by 25.21 percent during July-January period of the current fiscal (2017-18) to US$ 33.70 billion, whereas it rose by 9.88 percent to US$26.91 billion during the corresponding period of last fiscal (2016-17).
Besides, fresh opening of import LCs during July-January of current fiscal increased by 66.28 percent to US$45.67 billion as compared to the same period of the previous year.
Debashish Chakraborty expressed the hope that the situation would soon come normal on the back of rising inflow of remittance and export earning.
The central bank sold $175 million and bought $1.93 billion in 2016-17.

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