Kazi Zahidul Hasan :
Bangladeshi taka has depreciated about five percent against the greenback over a period of last one year, and the value of local currency keeps falling further this year also amid soaring import cost causing concern to businesses and economy.
The overall import recorded a 27.57 percent rise to US$ 23.74 billion (C&F value) during July-November period of current fiscal compared to 9.50 percent rise to US$ 18.61 billion during the corresponding period of previous fiscal, according to Bangladesh Bank (BB).
Rising import cost has already sent a knock-on effect on the foreign exchange market making dollar rates high against local currency, said analysts.
They predict that consumers will be hard hit in coming months if prices of imported food and commodities go up further as a result of rising value of dollar, the most preferred global currency in global trading system.
BB figure shows, the average inter-bank exchange rate was Tk 78.96 against a dollar on January 17 last year, which reached Tk 80.59 on June 29, Tk 82.70 on December 28, Tk 82.84 on January 17 this year and Tk 82.90 on January 24 (yesterday).
“A relentless rise in the dollar has put pressure on the importers and manufacturers. Strong dollar also negatively impact their business operation,” Economist Dr Zahid Hussain told The New Nation yesterday.
He said the foreign exchange market has recorded a spike of Tk 4-5 to the dollar in a year meaning importers have to spend more on their foodstuffs, capital machinery and industrial raw materials imports.
If an importer imports goods or commodities worth US$10,000 million, he had to spend Tk 778,900 in January 2017. It is now Tk 829,000 due to the spike in dollar rates.
“Importers have to bear this additional cost for the exchange rate and they will definitely pass the cost on to consumers in the months to come increasing food and commodity prices. Such a price hike will hit the middle-income urban dwellers hard particularly,” said Dr Zahid Hussain.
He said even the prices of local products would go up as raw materials for production were mostly imported.
“Strong dollar is bane for both consumers and manufacturers. It leads to higher costs of imported raw materials and thereby push up prices of imported goods and local products,” said Economist Dr Ahsan H. Mansur.
He said taka continues to depreciate against dollar is not good for the economy. The depreciation will not only be stroke inflation, but it also push up prices of raw materials, intermediate goods and input costs of industries.
Dr Ahsan Mansur however said the rise in dollar versus taka favours exports and remitters more. “Our exports have become more competitive due to the devaluation of the taka, while families of Bangladeshi expatriates are getting more money cashing the higher dollar rate.”
“The negative impact of dollar rises on economy could be countered through export gains. But this was not happening as our merchandise export remained weak during the first half of this fiscal growing by 7.15 per cent,” he noted.
Bangladesh’s import bill stood at US$ 47 billion (C&F value) in the fiscal year 2016-17, showing a 9.0 percent year-on-year rise.
