Bangladesh Bank orders six banks to remove treasury chiefs amid dollar crisis

Bangladesh Bank dollar crisis

Dhaka: The Bangladesh Bank issued an order to remove the treasury heads of five domestic banks and one foreign bank for their role in driving up the price of the US dollar by holding onto more dollars than was necessary.

They made “excessive profit” through the treasury operation, a central bank spokesman said on Monday.

Another central bank representative confirmed that letters were sent to banks instructing them to take action against the officials.

To fully engage with the global market, Bangladesh adopted a floating exchange rate system in 2003.

However, the central bank established strict controls on the dollar exchange rate as a result of the significant loss of dollars it has in its reserves.

The cost of a US dollar in the kerb market increased to Tk 102 in the middle of May. In the following two months, the dollar supply in the market increased, mostly by the Bangladesh Bank, and the rate was somewhat stable, fluctuating between Tk 97-98.

Recently, it surged once more, causing the central bank to crack down on money changers for engaging in fraudulent practices to drive up the value of the US dollar relative to the Taka. At least five money exchange companies had their licences cancelled, and it demanded that scores of others account for infractions.

The steps taken by the central bank, however, had little effect on the market. On Monday, the dollar was exchanged at Tk 114 in the open market while the interbank rate was Tk 95.

Read: Fuel price hike triggers protests in Bangladesh

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