The floating or uniform exchange rate came as a major shock for the parents of students studying abroad as the cost of dollars exchanged through cards has gone up by almost 12%.
The rates of the US dollar exchanged through cards increased by as much as Tk13 to Tk108 from Monday to Wednesday after the uniform rates kicked off.
Bangladesh Foreign Exchange Dealers' Association (BAFEDA) and the Association of Bankers Bangladesh (ABB) decided that the cost of each dollar in credit cards and overseas education costs will be the same as the selling rate of the bank's cash dollar.
Banks have increased the price of the dollar in these two sectors since last Sunday and as a result, the cost of education abroad has increased overnight.
People had been paying Tk95 per dollar bought through cards for overseas tuition fees and purchases of services and goods, while those collecting the cash without using the cards were charged up to Tk 111.
Bankers said that the people mostly used foreign currency from their debit and credit cards during their travels abroad. Travellers use their foreign currency in their cards mostly for airfare, hotel bookings and shopping.
However, this has led the parents of students who have already sent their children abroad to study to feel the burn as they usually use cards to send money from Bangladesh.
Therefore, due to the sudden increase in the dollar price, the cost of purchasing various services and products including studying fees, seminar fees and online course fees will also increase by about 10% to 12%.
On Sunday (September 11), BAFEDA and ABB set the dollar exchange rate at a uniform rate, which many banks have implemented since September 12.
Earlier, the central bank encouraged customers to use cards instead of cash or paper dollars to reduce the cost of the dollar at higher rates.
Since last June 30, the central bank has been selling dollars to the banks, the banks have been giving dollars to the card customers at that rate.
When the dollar rate on the card was Tk95, the maximum was Tk121 in the curb market and customers had to count up to Tk111 when buying cash dollars from the bank.
At one point, the difference between the card rate and the cash dollar in the curb market and banks decreased slightly but did not fall below Tk12.
Card-based transaction rising
The use of foreign currency from cards dropped sharply after the Covid outbreak.
According to Bangladesh Bank data, card-based foreign currency transactions hit an all-time high of Tk397 crore in June.
The transactions crossed Tk300 crore for the first time in May after reaching Tk280 crore in March 2022.
Data analysis shows that card-based foreign currency transactions increased to Tk397 crore in June from Tk356.6 crore in the previous month.
In June 2021, the foreign currency transactions were Tk125.3 crore.
The card-based foreign currency transactions had surpassed Tk250 crore for the first time in January 2020, but began to drop sharply amid travel restrictions due to the Covid outbreak worldwide.
The card-based foreign currency transactions started rebounding strongly after July 2021 with the relaxation of travel restrictions and the amount crossed Tk250 crore in December 2021.
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