Money is weird. One day your Takas feel like they have some weight in your pocket, and the next, you’re looking at the exchange rate for BD to US currency and wondering if the website is glitching. It isn’t. If you’ve been trying to send money back home to Dhaka or you’re a freelancer in Chittagong trying to figure out why your Payoneer balance doesn't buy what it used to, you’re feeling the squeeze of a very real, very messy economic shift.
The gap between the Bangladeshi Taka (BDT) and the US Dollar (USD) has widened into a canyon.
Honestly, it’s frustrating. For years, the Bangladesh Bank tried to keep things steady, almost like holding a beach ball underwater. But eventually, your arms get tired. The ball pops up. That’s basically what happened with the exchange rate over the last couple of years. We went from a relatively stable 85 BDT per dollar to a world where 110 or even 120 BDT is the "new normal," depending on who you ask and which market you’re using.
The "Crawl" that changed everything
For a long time, the central bank used a fixed exchange rate. They decided what the money was worth. Simple, right? Well, not really. When the global economy started shaking—think post-pandemic supply chain mess and the war in Ukraine—the dollar became king. Everyone wanted dollars. Bangladesh, which imports a lot of oil, fertilizer, and consumer goods, suddenly needed way more dollars than it actually had in its piggy bank (the foreign exchange reserves).
To fix this, they introduced something called a "crawling peg" mid-2024. It sounds like something a toddler does, but in finance, it’s a way to let the currency devalue slowly rather than crashing all at once. The "crawling peg mid-point" was set around 117 BDT per dollar.
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But here’s the kicker: the official rate and the "kerb market" (the street rate) are rarely the same. If you walk into a bank in Motijheel, you might see one number. If you talk to a guy at a money exchange under a staircase, you'll see another. This gap is where most people get burned.
Why the BD to US currency rate keeps sliding
It isn't just one thing. It's a pile-up. First, you have the trade deficit. Bangladesh buys way more stuff from the world than it sells. Sure, the Ready-Made Garment (RMG) sector is a powerhouse, but it can't carry the whole country on its back when the price of fuel and food imports is skyrocketing.
Then there’s the remittance issue.
Remittances are the lifeblood of the Bangladeshi economy. Millions of workers in the Middle East, Europe, and the US send money home. But when the official bank rate for BD to US currency is significantly lower than the "hundi" or unofficial rate, people stop using banks. They use the unofficial channels because, frankly, why wouldn't you want an extra 5 or 10 Taka for every dollar? This creates a cycle. The government gets fewer dollars in its official reserves, the dollar gets scarcer, and the Taka gets weaker.
The hidden cost of a weak Taka
Inflation is the ghost in the room. When the Taka loses value against the dollar, everything gets more expensive. That smartphone you wanted? It's priced in dollars. The fuel for the bus? Dollars. The soybean oil in your kitchen? Dollars.
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Experts like Dr. Ahsan H. Mansur, a former IMF official and now a key figure in Bangladesh's banking reform, have frequently pointed out that the lack of a market-based exchange rate for too long created a massive backlog of trouble. When you try to defy market gravity, you eventually fall. And for the average person in Bangladesh, that fall looks like a 10% or higher inflation rate on groceries.
Making sense of the numbers right now
If you’re looking at a converter today, don't just trust the first number you see on Google. Google often shows the "interbank rate," which is what huge banks charge each other for millions of dollars. You and I? We don't get that rate.
- For Freelancers: You're likely getting hit with conversion fees. If the rate is 118, you might only see 114 after your platform takes its cut and the local bank applies its "buying rate."
- For Students: If you're heading to the US for grad school, the math is brutal. A $40,000 tuition bill that used to cost 34 lakh BDT now sits closer to 48 lakh BDT. That's a massive jump that has forced many families to rethink their plans.
- For Travelers: Cash is king, but it's expensive. Buying physical dollars in Dhaka has become a sport. Sometimes the money changers just... don't have any.
What should you actually do?
Stop waiting for the Taka to "go back to 85." It’s probably not happening. Most economists agree that the era of the cheap dollar in Bangladesh is over. The focus now is on stability, not returning to old rates.
If you're earning in dollars, this is actually your superpower. You're hedged against the local inflation. If you're earning in Taka, you need to be much more careful with where your money goes. Diversification isn't just a buzzword for Wall Street; it’s a survival tactic.
Look into "Wage Earner Bonds" if you’re an expat. They often offer better returns than just sitting on cash. If you're local, keep an eye on the Bangladesh Bank’s circulars. They change the rules on how much foreign currency you can hold or take abroad pretty frequently these days.
Practical steps for managing the currency shift
Don't just watch the ticker. Take action.
First, if you are sending money to Bangladesh, use legal channels. I know the "hundi" rate is tempting, but the government often provides a 2.5% incentive on top of the official rate for remittances sent through banks. Do the math—sometimes that incentive closes the gap enough to make the legal route safer and nearly as profitable.
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Second, if you’re a business owner importing goods, look into "forward contracts." This is basically an agreement with your bank to buy dollars at a set price in the future. It protects you if the Taka suddenly takes another dive next month.
Third, keep your "Dollar Endowment" or travel quota updated on your passport. If you plan on traveling, don't wait until the week of your flight to find currency. The volatility in the BD to US currency market means prices can jump 2-3% in a single afternoon if there’s a rumor of a shortage.
The reality of the Taka-Dollar relationship is that it’s currently in a state of "correction." The country is paying the price for years of a managed rate that didn't reflect the real world. It’s painful, but it’s also a move toward a more transparent, market-driven economy. Stay informed, use the 2.5% government incentives whenever possible, and always factor in a 5% "volatility buffer" when planning any major purchase involving US dollars.