Exporters say they are not getting exchange rate benefits

Exporters are supposed to get the advantages or disadvantages of exchange rate fluctuations. When the US dollar becomes costlier against the taka, Bangladeshi exporters will benefit and it is vice versa when taka appreciates against the greenback.

But that is not the case now as exporters claim they are not given benefits from sliding taka.

“Exchange rate is not favouring us. I got Tk 85.05 for a dollar before Eid,” said Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

When he saw he received lower than the inter-bank exchange rate of Tk 86.45 for a dollar, he contacted at least five banks to know the situation. But Agrani, Sonali, Dutch-Bangla, Premier and Shahjalal banks told him almost the same rate.

“On the other hand, I have paid Tk 91 for a dollar to pay my import bills,” a frustrated Hatem told the Business Insider Bangladesh on Saturday.

Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), also echoed the same.

“Banks are mostly benefitting from the exchange rate of dollars. Still, we are getting only 50 to 70 paisa more than the official exchange rate,” Azim said.

Mohiuddin Rubel, a director of BGMEA, said they are not getting the advantages of a favourable exchange rate. But they have to pay more when they buy dollars for import payments, he claimed.

Bangladesh’s exchange rate market has become volatile for the past few months due to a mismatch between demand and supply. Though the country’s exports rose over 33 percent in the first 10 months of the current fiscal year, imports grew by over 50 percent because of a steep rise in import bills. The remittance, which is another major foreign currency source for Bangladesh, is also declining compared to the previous year.

As a result, the market price of the dollar has crossed Tk 90 at import payments or BC sales. Insiders in the banks said remitters are being paid Tk 92 for a dollar in recent days. But exporters are getting on the basis of the inter-bank exchange rate, which has been increased by 25 paisa to Tk 86.45 a dollar last week.

“Exporters will get the official rate, not the market rate,” said Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank.

But for the retention quota, an exporter can exchange his sum at the market rate, he said. According to Bangladesh Bank rules, an exporter can retain 15 percent of his/her export proceeds.

However, he said big exporters are taking advantage of the exchange rate as they have professionals in their accounting and finance divisions.