Strong dollar on kerb market smacks of money laundering
Rejaul Karim Byron
The exchange rate of US dollar has been unusually high at the kerb market during the last three months -- a trend that might be a result of smuggling dollar out of the country by black money holders.According to Bangladesh Bank (BB), on August 7, each dollar was selling at Tk 72.90 on the kerb market -- Tk. 4.40 higher than the official selling rate of Tk 68.50. Industry experts and economists speculate that the kerb market is experiencing a rise in the demand for dollars following the anti-corruption drives of the present government as black money is being converted into dollars and then sent overseas. "The anti-corruption drives are on and the corrupt are worried about their illegally earned money," said Dr Sazzad Zahir, executive director of Economic Research Group, adding that the corrupt might be whitening their illegally earned money in the form of remittances. Pointing at a rising trend of remittance inflow since February, Dr Zahir said the black money holders might be converting their black money into dollar. They smuggle it out of the country and then bring it back to the country legally through remittances. Officials at the BB also speculated that the country's black money is being whitened through remittances as the money is being sent overseas as dollars and then returned in the country as remittances. The central bank has received similar complaints and asked law enforcers to investigate the matter, said a BB official. The official and kerb market dollar exchange rates started to widen in late May, said a BB source. "Usually, kerb market rates [of dollar] are a little bit higher than the official rate. Sometimes it's even lower than the official rate," the source added. In April, the price of dollar in the kerb market was even less than the official price, he said. During the first week of May, the official and kerb market exchange rates of dollar were the same -- Tk 69 per US dollar. The rate started to rise since then and stood at Tk 71.60 on July 18 while the bank rate was Tk 68.60. Since February this year, Bangladesh has been receiving over $500 million in remittances per month on an average. In July, the country witnessed a growth of 38 percent in remittance inflow when a total of $567 million was sent from overseas, according to the BB.
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