Al Amin :
The country’s export-oriented sectors have been losing competitiveness due to the strong position of the local currency (Taka) against the dollar for a long time.
The exporters are reportedly facing hurdles due to relatively higher exchange rate of the taka against its peers amid the pandemic situation.
The ongoing Covid-19-hit global economies, including Bangladesh, have been struggling to survive. Many organisations coupled with think-tanks are trying their level-best to show the right path aiming at revamping the domestic economy.
Following the situation, the entrepreneurs of the export-oriented sectors are now raising their demand for devaluation of the local currency to increase business competitiveness.
Economists also echoed the same considering the present situation as the exporters are passing through a difficult time resulting from the pandemic.
Import-export trade, remittances or foreign investment – these are usually calculated in US dollars. Even, every country considers the value of its currency in dollar in order to keep the internal currency system normal and to become beneficiary from bilateral trade.
If local currency is devaluated against the dollar, the country’s export will dominate over the competitive countries..
In the last 5 years from January, 2016 to January 2021, Bangladesh’s competitors-Vietnam, Indonesia, Sri Lanka and Cambodia’s currencies depreciated sharply, but the money remained strong as usual.
Mohammad Hatem, Senior Vice-President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told The New Nation, “We are repeatedly urging the government to devalue the local currency against dollar to boost the country’s exporting sector.”
At least a different rate should be given to exporters in order to recovering from the economic shocks resulted by the ongoing pandemic, he added.
Economists are in favour of reducing the value of the ‘dollar money’ by considering the market, even if it is not a big leap.
Dr Nazneen Ahmed said, “Taka could be devalued. But, I do not want to talk about the exchange rate for the export sector separately.”
Bankers, however, said that the import trade has started growing again after the big push by the ongoing Covid-19 pandemic. Under this situation, inflation will increase, if Taka is devalued. So, the authority will have to think it deeply.
The pandemic situation has prompted the experts to call on the central bank and the government to take initiatives to protect exporters from the appreciating trend of the local currency.
The Center for Policy Dialogue (CPD) has also recommended currency depreciation recently as it thinks that the currency depreciation brings good for a longer period in economy, though it has a negative impact in the short term.
The currency devaluation will increase inflation, but it will increase demand for exports for a long time, it had pointed out.
