Bangladesh Bank (BB) is now scrutinising the responses by 26 commercial banks on their alleged attempts to mislead the central bank with 'untrue information' about foreign exchange rates offered particularly to the importers.
In response to show-cause notices served by the central bank, the banks recently clarified their positions on the allegations and sought exemption from the allegation, according to officials.
They also gave formal commitments to stay alert in this regard in future.
"We'll decide the next course of action after completing scrutiny of the clarifications earlier submitted by the banks concerned," SK Sur Chowdhury, deputy governor of Bangladesh Bank (BB) told the FE on Thursday.
The BB officials, however, said the banks have explained their positions on the allegation and mentioned overall situation of the foreign exchange (forex) market.
The central bank earlier served show-cause notices to 26 banks in three phases, asking them to explain their positions on differentiate reporting of foreign exchange rates-particularly BC (Bills for Collection) selling to the BB within two working days.
In the notices, the BB had asked the managing directors (MDs) and chief executive officers (CEOs) of the banks as to why the central bank should not take actions against banks in line with the Banking Companies Act.
In the second half of November 2017, a good number of banks reported on their BC selling rate ranging between Tk 82.90 and Tk 82.95 to the central bank, using 'web-link' by 11 am each working day.
The banks, however, traded the US dollar between Tk 84.50 and Tk 85.50 in the name of 'corporate deal', according to the market insiders. The rates were not reported to the central bank, they added.
"We had issued the show-cause notices to the banks on the basis of our inspection reports," another BB official said, replying to a query.
On the other hand, a senior treasury official of a leading private commercial bank said, some banks had offered higher rates on the US dollar to the exporters for maintaining business relations.
"We had also offered higher rates on the US currency to overseas exchange houses for receiving inward remittances to meet our internal foreign currency requirements," he said.
He further said that some overseas exchange houses and exporters were also responsible for creating the recent volatility in the forex market.
Meanwhile, the Bangladesh currency maintained a deprecating trend against the US currency in the recent months mainly due to short supply of the greenback in the forex market.
In the inter-bank forex market, the Taka depreciated further by 10 paisa on Thursday against the US dollar due to a higher demand for the greenback.
The exchange rate of the Taka against the US dollar was quoted maximum at Tk 82.50 on the day against Tk 82.40 of the previous working day, according to the market operators.
The BB has provided its foreign exchange support continuously through selling the US dollar to the banks for settlement of the import bills.
As part of the move, the central bank directly sold US$ 30 million at market rate to two commercial banks on Thursday to meet the growing demand for the greenback.
"We're selling the foreign currency to the banks to settle outstanding letters of credit (LCs) against imports, particularly of fuel oil, food grains and capital machinery," another BB official said.
The central banker also said that such liquidity support might continue in line with the market requirement. "We're monitoring the overall forex market situation closely."
The BB has resumed providing the foreign exchange support in the recent months through selling of the US currency to the banks directly to keep the market stable.
A total of $844 million was sold since July 01 of this fiscal year, 2017-18, to the commercial banks as part of its ongoing support, according to BB's latest data.
The market operators said the demand for the US dollar is gradually increasing, mainly due to higher import payments pressure-particularly of capital machinery, petroleum products and consumer items, including food grains.
