DHAKA, Dec 30, 2024 (BSS) - The Bangladesh Bank has officially announced a maximum exchange rate of Taka 123 per dollar for remittance collection in a bid to stabilise the exchange rate market. 

For cross-currency transactions, the calculated rate cannot exceed this limit, confirmed the Bangladesh Bank today.

Aside from capping the exchange rate for remittance collection, the central bank has also implemented a dashboard to monitor market data closely, ensuring greater transparency and control.

Amid the turmoil to some extent faced by the country's foreign exchange market, the central bank has drawn up this measure, alongside others.

As the country's foreign exchange market is facing turmoil to some extent due to surging dollar demand, Bangladesh Bank has identified key causes and has been implementing corrective measures, according to central bank officials.

According to officials, the central bank attributed the ongoing dollar market volatility to several interconnected factors.

One of the reasons is the increased demand for dollars at the end of the financial year, which sees a spike in loan repayments and other financial obligations. Compounding this is the central bank's recent suspension of dollar sales to meet IMF-mandated targets. 

This decision has restricted the supply of dollars in the interbank market, further widening the gap between demand and supply.

Besides, Bangladesh's downgraded credit rating has disrupted correspondent relationships with foreign banks, making issuing UPAS (Usance Payable at Sight) letters of credit, deferring payment maturities, and maintaining the inflow of offshore banking loans more challenging.

Another significant factor is the role of aggregators and intermediaries in remittance collection. 

Besides, a mismatch in dollar inflows and outflows by commercial banks has further complicated the situation, added the central bank.