The floating or uniform exchange rate has been a major shock to parents of students studying abroad, as the cost of dollars exchanged by cards has increased by almost 12%.
Card-swap US Dollar rates increased from Tk 13 to Tk 108 from Monday to Wednesday after the launch of flat rates.
The Bangladesh Stockbrokers Association (BAFEDA) and the Bangladesh Bankers Association (ABB) have decided that the cost of every dollar in credit cards and study abroad fees will be the same as the bank cash dollar selling rate.
Banks have been raising the price of the dollar in these two sectors since last Sunday and as a result, the cost of overseas education has increased overnight.
People paid Tk 95 per dollar purchased by card for tuition abroad and purchases of services and goods, while those who collected the money without using the cards were charged up to Tk 111.
Bankers said people mainly use foreign currencies from their debit and credit cards when traveling abroad. Travelers use their foreign currencies in their cards primarily for airfares, hotel reservations, and purchases.
However, this has led parents of students who have already sent their children abroad to study to feel burned 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 study fees, seminar fees and online course fees, will also increase by about 10% to 12%.
On Sunday September 11, BAFEDA and ABB fixed the dollar exchange rate at a uniform rate, which many banks have implemented since September 12.
Previously, 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 banks, banks are giving dollars to card customers at this rate.
When the dollar rate on the card was 95 Tk, the maximum was 121 Tk at the curbside market and customers had to count up to 111 Tk when buying dollars in cash from the bank.
At one point, the difference between the card rate and the cash dollar on the sidewalk market and banks decreased slightly but did not fall below Tk12.
Increase in card transactions
Card foreign currency usage dropped sharply after the Covid outbreak.
According to Bangladesh Bank data, card-based foreign exchange transactions hit a record high of Tk 397 crore in June.
Transactions crossed Tk 300 crore for the first time in May after hitting Tk 280 crore in March 2022.
Data analysis shows that foreign currency card transactions increased to Tk 397 crore in June from Tk 356.6 crore in the previous month.
In June 2021, foreign exchange transactions amounted to Tk 125.3 crore.
Foreign currency card transactions had topped Tk 250 crore for the first time in January 2020, but started falling sharply due to travel restrictions due to the Covid outbreak around the world.
Card foreign currency transactions started to rebound strongly after July 2021 with the easing of travel restrictions and the amount exceeded Tk 250 crore in December 2021.