BB revises forward dollar selling rules

Bangladesh Bank has revised the rule for fixing the rate of forward foreign currency selling.

According to a circular issued by the central bank on Tuesday,  banks can now sell dollars in forward for a maximum of three months instead of one year.

According to central bank spokesperson Md Mezbaul Haque, banks will have the flexibility to engage in forward dollar sales for up to three months. "Based on the current rate, banks can charge a maximum of Tk113.85 per dollar for forward sales."

The new circular issued on Tuesday specified that for early settlement of a forward contract, the premium must be adjusted according to the actual duration.

Prior to the implementation of these new guidelines, there were no standardised procedures governing how banks established the value of the dollar in such transactions. Each bank determined their forward dollar selling and buying rates independently.

Earlier on Sunday, the central bank said in a directive that banks can fix the rate of forward dollars by adding the maximum six-month moving average rate of treasury bill (SMART) + 5% per year with the current dollar rate.