Introduction
In Bangladesh, many people need foreign money. This is called forex. But there is not enough foreign money in the market. So people cannot always get cash dollars or other foreign notes.
Because of this problem, more people are now using cards to pay in foreign money. A card can be a debit card or a credit card. It is easy to carry and easy to use.
More People Use Cards for Forex
In September, people in Bangladesh used their cards for foreign money payments worth Tk 689 crore. In August, the number was Tk 658 crore. This means it went up by 6.29 percent in one month.
Even though all card payments together went down, the foreign card payments went up. In September, all card payments were Tk 39,943 crore, which was 2.62 percent less than before. But the part for foreign money became bigger.
Why People Are Using Cards
Bank leaders explained why people use cards more.
- Sometimes the rate for foreign money is better on cards than in cash.
- Many banks have stopped giving student files. So parents use cards to pay for children who study abroad.
- Travelers cannot find enough cash dollars. So they pay with cards when they travel.
Travelers now use cards for many things. They pay for plane tickets. They pay for hotels. They pay for food and shopping. They use cards because cash dollars are very hard to find.
Example from the Past
Md Abu Bokar Siddique, Head of Card at Mutual Trust Bank, said something important. He said that in January 2022, foreign card payments were Tk 219 crore. But now it is much higher. This shows that card use for forex is growing year by year.
Other Bank Views
Ahsan Ullah Chowdhury, Head of Digital Financial Services at Eastern Bank, also shared his thoughts. He said there are many reasons why card forex payments are going up. The main reason is the gap between card rates and cash rates. Another reason is the problem with banks not giving foreign currency easily.
Liquidity Problem in Banks
At the same time, banks in Bangladesh are facing a money shortage. This is called a liquidity crisis. It means banks do not have enough free money to give.
In August, banks had Tk 175,000 crore in free money. But in September, this went down to Tk 164,000 crore. That is a big fall in only one month.
Because of this shortage, banks are borrowing from each other. The cost of this short borrowing is called call money rate. This rate went up to 8.07 percent by the end of last week.
Why This Happened
There are some reasons for the shortage of money.
- The government is borrowing more money from banks by selling treasury bills and bonds.
- Banks are also buying dollars from Bangladesh Bank.
- These things reduce the amount of free money in the banks.
Some banks, especially Shariah-based banks, are in more trouble. Emranul Huq, Managing Director and CEO of Dhaka Bank, said that these banks are facing a strong liquidity crisis. Other banks still have some good liquidity. But overall, the problem is big.
Lending Rates Go Up
Another change is that the Bangladesh Bank removed the 9 percent lending cap. This means banks can now give loans at a higher interest rate. Because of this, both lending rates and deposit rates went up.
When lending rates go up, it becomes more costly for people and businesses to borrow money. When deposit rates go up, banks also need to pay more to people who save money. This increases the cost of funds for banks.
Experts say the lending rates may go even higher in the coming days. This is because the government still needs to borrow more money from banks to cover its expenses.
What It Means for People
For normal people, this news means two things.
- If they travel or study abroad, they may need to use cards more for payments in dollars or other foreign money.
- If they take loans from banks, they may need to pay more interest because lending rates are rising.
Conclusion
To sum up, foreign card payments in Bangladesh grew by 6.29 percent in one month. People are using cards because there is not enough cash dollar supply. At the same time, banks are facing a money shortage, and interest rates are rising. Travelers, students, and families are now depending on cards more than before.This shows that Forex Card Transactions Growth is a clear trend in Bangladesh.
