Bangladesh Money Changers Cap Cash Dollar Rate at Tk126.50 Amid Demand Surge

Dhaka, August 24, 2026 — The Money Changers Association of Bangladesh (MCAB) has set new exchange rates for the kerb market to stabilise cash dollar prices, capping the selling rate at Tk 126.50 and the buying rate at Tk 125.50 per US dollar. The announcement was made by MCAB President MS Zaman at a press conference in Dhaka on 24 August 2026.

The move comes after the cash dollar rate in the kerb market had recently climbed to as high as Tk 128, driven by declining remittance inflows through expatriates carrying cash and increased demand for dollars after India reopened medical and travel visas for Bangladeshis.

📊 The New Rates

• 💰 Buying rate: Tk 125.50 per USD
• 💰 Selling rate: Tk 126.50 per USD (maximum cap)
• 📈 Previous kerb market high: Tk 128 per USD
• 🏢 Bank remittance rate: Tk 122.30 per USD (banks buying from expatriates)
• 📜 LC settlement rate: Tk 122.95 per USD (banks settling letters of credit)
• 📅 Spread (kerb vs bank): Tk 3.55-4.20 per dollar

Zaman said the new rates are being communicated to all money changers across the country through MCAB's website. Licensed money changers are expected to comply with these caps, which aim to prevent further escalation in the kerb market.

👥 Why the Dollar Rate Is Rising

Several money changer owners identified two key drivers behind the recent dollar volatility:

• 📨 Declining cash remittance inflows — fewer expatriates are carrying cash dollars into Bangladesh, reducing the supply of physical currency in the kerb market
• 🌐 India visa reopening — demand for cash dollars surged after India reopened medical and travel visas for Bangladeshis, creating immediate demand for physical USD
• 🏛 Gulf hostilities — ongoing Middle East geopolitical tensions have disrupted normal remittance channels

Treasury officials at several public and private banks confirmed that banks bought remittances from expatriate Bangladeshis at Tk 122.30 per dollar on Sunday, while settling letters of credit at rates of up to Tk 122.95 per dollar. The significant gap between bank rates and kerb market rates has created arbitrage opportunities and fuelled the kerb market's upward pressure.

🚧 Money Changers Reject Manipulation Allegations

On dollar market volatility, Zaman rejected allegations that money changers manipulate rates, saying the sector lacks the scale and capital to influence the market. He instead blamed banks for creating instability and profiting from it in the post-COVID period.

"Money changers only trade cash currencies and cannot directly bring in remittances," Zaman said. Their main source of foreign currency is cash carried by returning travellers and expatriate workers, which they bring into formal channels and thereby indirectly support reserves. He argued that Bangladesh Bank regulates the interbank market and sets rates for scheduled banks, but lacks similarly clear guidelines for money changers.

🤝 MCAB Calls for Clearer Regulation

Zaman called for:

• 📜 Clearer rules for money changers — similar to those governing scheduled banks
• 💰 Greater scope for legal foreign currency trading — to reduce the illegal market
• 🛡 Simpler policies — to curb illegal currency trading
• 🕵 Action against unlicensed operators — MCAB has shared a list of illegal and unlicensed money changers with Bangladesh Bank, law enforcement agencies, and journalists

Zaman said licensed operators were following the central bank's instructions and that the MCAB is cooperating fully with regulatory authorities to maintain orderly market conditions.

🌐 Strategic Context for Bangladesh's Export Economy

The dollar rate cap has direct implications for Bangladesh's export economy. The spread between bank rates (Tk 122.30-122.95) and kerb market rates (Tk 125.50-126.50) creates a parallel exchange rate that affects import costs for raw materials, capital machinery, and energy commodities — all critical inputs for the RMG, pharmaceuticals, and agro-processing export sectors.

For exporters, the kerb market rate is less relevant than the interbank rate, but the overall dollar volatility pressures the taka and increases the cost of trade finance. Bangladesh Bank's reserves have stabilised at $37.24 billion (gross) as of August 2026, but the continuing gap between formal and informal dollar channels highlights the structural challenges in the foreign exchange market that the central bank must address as part of its broader monetary policy framework.

The India visa reopening factor is particularly significant — it signals normalising bilateral relations between Bangladesh and India under the BNP government, but also creates immediate dollar demand that the formal banking system must accommodate. The MCAB's self-regulation of kerb market rates is a positive step, but the fundamental solution lies in increasing formal remittance channels, reducing the gap between interbank and kerb rates, and ensuring that Bangladesh Bank's monetary policy provides sufficient clarity for all market participants.

💰 Broader Implications for Trade and Investment

The dollar volatility has cascading effects across Bangladesh's trade ecosystem. For RMG exporters who import raw materials under back-to-back LCs, any taka depreciation increases input costs and squeezes margins that are already under pressure from soft global demand. The Tk 3.55-4.20 spread between bank and kerb rates also creates opportunities for informal dollar trading, which undermines the formal financial system and reduces the effectiveness of Bangladesh Bank's monetary policy transmission.

For foreign investors evaluating Bangladesh as a manufacturing destination, dollar volatility adds an additional layer of currency risk to their investment calculations. The BNP government's efforts to attract FDI through the newly formed Invest Bangladesh Authority will need to be supported by a stable and predictable exchange rate regime to convince investors that their capital returns will not be eroded by currency depreciation. The MCAB's proactive rate-capping initiative, while welcome as a short-term stabilisation measure, highlights the need for deeper structural reforms in Bangladesh's foreign exchange market architecture.