Staff Reporter : The central bank has kept unchanged the US dollar retention limit that exporters have to maintain in their foreign currency account from the shipment proceeds as Bangladesh continues to face the shortage of the American greenback.
Traders are allowed to keep a portion of their earnings in the export retention quota (ERQ) accounts to settle back-to-back letters of credit liabilities without facing exchange losses.
For instance, exporters are entitled to a foreign exchange retention quota of 60 per cent of repatriated FOB (free on board) value of their exports.
In July last year, the BB asked banks to encash 50 per cent of the balance held in the ERQ accounts immediately.
It also ordered them to revise downwards the retention limit from 15 per cent, 60 per cent and 70 per cent to 7.50 per cent, 30 per cent and 35 per cent, respectively.
The tenure of the reduced limit ended on December 31.
At the time, the BB said the retention of foreign currencies in such accounts for a longer period without using them is a cost to exporters since deposits in the taka bear adequate yield.
Yesterday, the central bank kept the limit unchanged at 7.5 per cent, 30 per cent, and 35 per cent.
The latest move from the BB comes as the country continues to witness the forex shortage owing to the depletion of the forex reserves amid higher import bills against lower-than-expected remittance and export receipts.
A central banker said wising not to be named that if exporters keep a lower amount of export proceeds in the ERQ accounts, the liquidity in the banking system improves.
However, the forex reserves came down to $21.45 billion on September 21.
The decline in reserves continued due mainly to a significant dollar shortage on the market, which has compelled the central bank to conduct dollar sales to banks from its reserve.
The depletion is causing concerns for both the government and the central bank due to potential fallout.