Following the Bangladesh Bank’s recent decision to permit non-authorised dealer (non-AD) banks to buy and sell foreign currency, 666 branches of 23 banks are now seeking to trade forex with travelers.

These non-AD banks have already applied for permission to the regulator, said central bank Executive Director and spokesperson Md Serajul Islam, adding that no approval has been issued in this regard as yet.

Currently, around 1,200 authorised dealers’ branches of banks and 235 licensed money exchangers have the central bank’s authorisation for trading foreign currency with travelers. But around 600 money exchangers are buying and selling foreign currency illegally, officials say.

Before the move, the central bank on August 11 made a decision to grant permission to non-authorised dealer banks for buying and selling foreign currency in a bid to curb the dominance of illegal money exchangers.

As per the central bank rules, a money exchanger is permitted to hold a maximum of $25,000 at the close of each business day. Central bank officials said the cash beyond this limit would have to be deposited in their respective bank’s foreign currency account.

The balance of that account must not exceed $50,000 at any point in time, said Bangladesh Bank officials.

However, central bank inspection teams recently found that the money exchangers were maintaining several books for the transaction of foreign currency. In most of the cases, the money exchangers are keeping USD beyond the regulated limit, they added.

On Sunday, the USD rate stood at Tk 108 to Tk 110 in the kerb market, but the inter-bank exchange rate stood at Tk 95 per USD. Last week, banks collected USD at Tk 110 to Tk 112 per dollar from the foreign exchange houses.

The volatility in the foreign exchange market began in August last year as economic recovery from the Covid-19 crisis pushed up import costs. The situation further deteriorated from February this year after Russia invaded Ukraine. The central bank continues to inject USD in the banking sector to cool down the forex market. The banking regulator had injected a record $7.62 billion from its reserves to banks in the last FY.