Bangladesh Bank has recently introduced new regulations governing the determination of future dollar prices (forward rates). These rules establish a maximum rate for such transactions. Under these updated guidelines, banks will be permitted to charge a maximum of 5 percent above the prevailing SMART (Six Months Moving Average Rate of Treasury Bills) rate after one year. This regulatory change was communicated through a notification issued earlier this week.
The SMART rate, which serves as the basis for calculating these future dollar prices, is published by Bangladesh Bank at the start of each month. In July, the SMART rate was recorded at 7.10 percent, and it inched up to 7.14 percent in August, remaining steady in September.
Currently, individuals or businesses looking to book dollars for future transactions can secure a rate of 123.35 BDT per dollar for a one-year period. Should they opt for monthly pricing, the rate will gradually decrease on a monthly basis. For reference, the current import price for a dollar stands at 110 taka.
The implementation of these new rules by Bangladesh Bank follows actions taken against ten private sector banks for selling dollars to importers at inflated prices. However, some of these banks have defended their actions, claiming that they charged higher rates to importers while collecting future prices.
The ten banks facing penalties for their pricing practices are Mercantile Bank, Premier Bank, BRAC Bank, Madhumati Bank, Midland Bank, Exim Bank, Social Islami Bank, Al-Arafah Islami Bank, Shahjalal Islami Bank, and Trust Bank. It is worth noting that additional banks may also face penalties as per available information from various sources.
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