September 13, 2026

The Exchange Rate Is Part of Your Landed Cost

Chinese yuan and US dollar banknotes scattered and overlapping, representing the currency conversion sitting inside every China import

Every cost guide we have published — including our own landed cost calculation — quietly assumes one thing that is not true. It assumes the price you agreed is the price you pay.

Your supplier quotes in US dollars. You earn in taka, sell in taka, and pay your bank in taka. Somewhere between agreeing the order and settling the payment, a conversion happens at a rate nobody fixed when you shook hands.

For a small order that gap is noise. On a container, it is a real number, and it moves in one direction more often than the other.

When the rate is actually struck

This is the part that surprises people, so it is worth being precise.

The rate is not fixed when your supplier quotes you. It is not fixed when you agree the order. It is generally not fixed when your bank opens the letter of credit either — opening an LC is your bank undertaking to pay, not the moment your taka converts.

The conversion happens when the payment is actually settled: when documents are presented and accepted and your bank debits you. On a sea shipment that can be two to three months after you agreed the price, and on a usance LC later still.

So the sequence is: you commit to a dollar figure today, and you find out the taka cost of it later. Our guide to how a letter of credit works covers the payment mechanics; this is the currency layer sitting underneath them.

Why this matters more than it used to

Bangladesh has changed how the taka's value is determined.

In May 2024 Bangladesh Bank introduced a crawling peg — a managed band — as a transitional step. In May 2025 that gave way to a more flexible, market-based regime, where the rate responds to market conditions rather than being administratively held within a narrow band.

The practical consequence for an importer is straightforward. Under a tightly managed rate, tomorrow's rate was fairly predictable from today's. Under a market-based one, it is less so. That does not mean the rate will move against you — it means the rate is a variable in your costing rather than a constant, and it should be treated as one.

We are deliberately not quoting a rate here. Any figure printed in an article is wrong by the time you read it. Check the current rate with your own bank on the day you need it.

The three places currency touches your cost

Your goods. The obvious one. A dollar invoice converted at a weaker taka costs more taka.

Your freight and charges. International freight is frequently quoted in dollars too, so the same movement hits the shipping line of your costing as well as the goods line. Our breakdown of container shipping costs sets out what those components are.

Your duty. Duty and taxes are assessed on the value of the goods converted into taka. The rate used for that customs conversion is not necessarily the same rate your bank charges you for the payment, so the two figures can be based on slightly different numbers. Ask your C&F agent which rate was applied on your assessment — it is on the paperwork, and our guide to what a C&F agent does covers reading that documentation properly.

Alongside those, remember the bank's own charges. The rate you get is a selling rate for foreign currency, which is not the mid-market rate you see quoted in the news, and there are LC and handling charges on top. Ask your bank to show you the all-in cost rather than the headline rate.

What you can actually do

You cannot control the exchange rate. You can control how exposed you are to it.

Price your retail with a buffer. If you set your selling price from the order-day rate with a thin margin, a movement between order and settlement eats the margin directly. Build a cushion rather than discovering you needed one
Ask your bank what forward cover is available. Banks can sometimes fix a rate for a future payment. Whether it is available to you, at what cost, and for what tenor is a question for your relationship manager — but most small importers have never asked
Shorten the gap where it is cheap to do so. A sight LC settles sooner than a usance LC. Credit terms are useful, but they are also a longer window of currency exposure, and that is part of their real cost
Know your break-even rate. Work out the rate at which a shipment stops being profitable and write it down. It converts a vague worry into a number you can watch
Do not quote long-dated fixed prices to your own customers in taka for goods you have not yet paid for, unless your margin can absorb a move
Keep the dollar figure visible in your records. If your books only hold the taka amount, you lose the ability to see whether a cost increase came from the supplier or from the currency

The uncomfortable arithmetic

Consider what a movement does to a thin-margin import.

If you work on a 10% gross margin and the taka weakens by 5% between your order and your settlement, you have lost roughly half your margin on that shipment — without your supplier raising a price, without a delay, without anything going wrong operationally.

That is the whole point of this article. Currency is not an exotic financial concern for large traders. For a small importer running normal margins, it is one of the larger uncontrolled variables in the business, and most people track it only by noticing that things feel more expensive than they used to.

Where to start

If you have never looked at this, do one thing this week: take your last three shipments, find the rate on the day you agreed each order and the rate on the day your bank debited you, and calculate the difference in taka.

For some importers that number is trivial. For others it is larger than the freight bill. Either way, you will know which kind of importer you are, and you can plan accordingly.

Then have the conversation with your bank about what cover is available, and start writing a rate assumption into your costing sheet rather than leaving it implicit.

Exchange rate policy, bank charges and the availability of forward cover change over time and vary between banks, so confirm the current position with your own bank rather than relying on a general guide, including this one.

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