Bangladesh Bank caps exchange rate spread at Tk 1

Dollar 100 currency notes

Dhaka, Jan 2 - Bangladesh Bank has introduced a maximum exchange rate spread of Tk 1 - meaning the difference between the buying and selling rates of a foreign currency cannot exceed Tk 1, to ensure uniformity and transparency in exchange rate practices.

The Foreign Exchange Policy Department of the central bank issued a circular in this regard on Thursday.

The circular stated, “The application of unusual spreads by Authorized Dealers (ADs) between buying and selling rates of foreign currency results in discriminatory currency arrangements and multiple currency practices.”

To address this issue, ADs are now required to apply a maximum of Tk 1 as spread between buying and selling while each AD shall apply spot rate uniformly irrespective of the size for all buying transactions of a business day.

Similarly, uniform spot rate shall also be maintained for all selling transactions of a business day, it added.

The central bank also issued instructions to display the exchange rates on digital screens at AD branches and on their official websites to ensure visibility for customers.

ADs have also been instructed to report their daily foreign exchange transactions to Bangladesh Bank following the procedures outlined in relevant guidelines, including the Guidelines for Foreign Exchange Transactions-2018, FE Circular Letter No 06/2022 and FE Circular No 38/2024.

Non-compliance with these regulations will result in punitive measures, including financial penalties, under the Foreign Exchange Regulation Act, 1947 and the Bank Company Act, 1991, the circular stated. - UNB