The Taka has officially depreciated against the US dollar for the first time in seven months, following a recent decision by the central bank to raise the reference rate for taka-dollar transactions by Tk 2.
This shift comes amid increased instability in the local foreign exchange market, where banks were quoting remittance rates as high as Tk 129 per dollar. In response, Bangladesh Bank (BB) adjusted the mid-rate for the crawling peg system, setting it at Tk 119 for spot purchases of the dollar by banks.
As of January 1, 2025, following this mid-rate adjustment, banks began transacting US dollars at Tk 122, up from Tk 120 on the first day of the year, according to data from the central bank. This represents a depreciation of around 11 percent for the Taka against the greenback over the past year, as the exchange rate stood at Tk 110 per dollar in January 2024.
In May 2024, the central bank introduced the crawling peg system, initially setting the mid-rate at Tk 117 per dollar. This system allows banks to buy and sell dollars freely around the mid-rate in both customer transactions and interbank deals.
Following the recent adjustment, commercial banks are now allowed to buy and sell dollars with a fluctuation of 1.5 to 2.0 percent from the mid-rate. Bangladesh Bank also set the maximum exchange rate for remittance collections at Tk 123 per dollar, ensuring the same rate applies to both remittance and export earnings.
In December 2024, some banks quoted higher rates for remittance collections due to a surge in demand for dollars to settle overdue letters of credit (LCs) and to open new ones for importing Ramadan essentials. In response, the central bank warned banks against causing further volatility in the exchange rate, threatening financial penalties starting at Tk 10 lakh for those found responsible. Banks were also instructed to maintain a reasonable spread between buying and selling rates, with the difference not to exceed Tk 1 per dollar.
