BB mulls uniform calculation of forward rates - Share market analysis of dhaka stock exchange, Bangladesh

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17 May, 2018 10:41 AM Source: The Financial Express Bangladesh

The central bank plans to develop uniformity of calculation in case of forward rates among the banks aiming to ensure discipline in the country's foreign exchange market.

The Bangladesh Bank (BB) has asked for the methodology of calculation on forward rates from nine banks within a week, according to officials.

The instruction came at a meeting of senior officials of the banks held at the central bank headquarters in Dhaka Wednesday with Mohammad Khurshid Wahab, General Manager of the BB's Foreign Exchange Policy Department (FEPD), in the chair.

"We'll take the next course of action after receiving the methodology of such calculation from the banks," a BB senior official told the FE after the meeting.

The latest move came against the backdrop of rising trend in forward deals with offering different rates by the banks concerned to their clients.

At the meeting, the central bank officials were briefed about the banks' methodology of calculation on forward rates using various variables including spot exchange rate and interest rates on currencies.

"Yes, we will submit our calculation methodology to the relevant department within the timeframe," a senior treasury official of a leading private commercial bank (PCB), who attended at the meeting, told the FE.

He also said that the banks are free to deal in forward buying and selling of foreign currencies in accordance with international best practices.


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