Foreign currency transactions via cards hit an all-time high of Tk. 356 crore in May 2022 due to a rise in the number of travelers going abroad. This is a massive 233% rise in 2022. Data from Bangladesh Bank showed that the transactions were Tk. 241 crore in April of 2022. The article consists Foreign Currency Transactions Hit High in Bangladesh.
Bankers of Bangladesh say transactions of a high amount of money through cards had troubled the ongoing situation of the country’s foreign exchange reserve. Mr. Mahiul Islam, Head of Retail Banking at BRAC Bank, stated many people had traveled abroad in May 2022 during the holiday of Eid-ul-Fitr, pushing the foreign currency transactions up noticeably.
Rates of flights also increased substantially during this period. In addition, the travelers also purchased a good number of products while traveling, resulting in increased spending on the greenback. People had been compelled to cancel traveling abroad at the height of the COVID-19 pandemic, which is why there was an increase in travelers in May, Mr. Mahiul added. Although the taka has depreciated significantly concerning its exchange rate against the dollar recently, he said that spending through cards is yet to decline. However, he further noted that card transactions might decrease in the days.
Syed Mahbubur Rahman, Managing Director of Mutual Trust Bank, echoed him. He said many people went abroad to seek medical treatment in May, which increased foreign currency transactions through cards. Moreover, HM Mostafizur Rahman, Head of Retail Banking at Dhaka Bank, claimed the number of people traveling abroad had recently decreased because of the government and central bank’s efforts.
The government and Bangladesh Bank have recently imposed restrictions on their employees traveling abroad to cut the spending on the dollar. Bangladesh Bank officials said the country’s foreign exchange reserves were under pressure due to surging import payments and a decline in remittance inflow. The rise in the expenditure on cards also played a role in exacerbating the force, he said.
Import payments amounted to $82.49 billion in FY22, up 36 percent year-on-year, while the amount of remittance coming in fell 15 percent to $21.03 billion. Against this backdrop, the reserves stood at $39.66 billion as of August 3 compared to $46.15 billion on December 30 last year. Besides, the taka’s exchange rate on the interbank platform increased to Tk. 94.70 for each dollar on August 4 in contrast to Tk. 84.80 a year ago.
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