Monirul Alam :
The current trend of depreciation of Bangladeshi Taka (BDT), if prolongs, would affect local businesses and the country’s economy.
Taka depreciated alarmingly in last one year by 3.77 percent against U.S dollar as the exchange rate moved higher to BDT 83.75 from BDT 80.70 between September 2017 and the corresponding month of this year, according to Bangladesh Bank (BB) statistics.
Abul Kasem Khan, President, Dhaka Chamber of Commerce and Industry (DCCI) said, Bangladesh is an import dependent country and cost of import goes higher due to Taka depreciation.
He said, Bangladesh’s import necessity is ranging from capital machinery to consumer goods and the country usually spends a huge amount in both the public and private sector in imports every year.
“So, a depreciation of Taka 5-6 against each of the U.S dollar is surely impacting initial budget of the goods needed to be imported. However, still we are not worried at this depreciation as the export value brings good return. But, if this trend of depreciation continues for longer term … It will be unbearable,” Kashem Khan told The New Nation. “We have to beware of that situation,” he said, adding that “We didn’t talk to Bangladesh bank yet in this regard. We are observing the trend.”
He said depreciation of Taka implicates both – good and bad.
“But depreciation of own currency sometimes turns burden for an import dependent country like us. However, the exchange rate is determined by the demand in the market. Businesses have less to do unless there is interference from the regulator.”
He said that Bangladesh used to import some essential consumer goods on emergency basis as well as to fulfill the gap between demand and supply. “So, finally the higher import cost goes to the consumers.”
He said Bangladesh’s private sector has narrow foreign loan exposure, which is positive in a situation that emerges from the current currency depreciation.
According to BB statistics, the country’s import cost was U$$ 43490.60 billion against export value of U$$ 34655.90 billion.
Since 2010, BDT depreciation runs higher to 3.77 percent against U.S dollar except for another major depreciation in 2012. Then, BDT depreciation was around 5.0 percent as exchange rate against one US dollar went higher to BDT 81.75 from BDT 77.00, the BB data shows.
Otherwise, in the intermediate period of the current decade, the exchange rate of BDT was stable against foreign currency.
Commenting on the depreciation, a senior banker seeking anonymity said that the trend of the recent devaluation of Taka suggests the central bank let loose the exchange rates.
The banker said the U.S dollars and other foreign currency turn costly for the individual travelers, patient outgoing for treatment and students moving abroad.
However, the demand for foreign currency is rising, mainly US dollars, as this currency is widely accepted internationally, the banker added.
Banks, usually, preserve foreign currency from respective transactions and collect those from the central bank in case of emergency.
Bangladesh has adequate reserves of foreign currencies, which moved higher to U$$ 32816.62 this September; and it is equivalent to around seven month’s import cost, according to the BB data.
Deputy Governor Ahmed Jamal was contacted over his cell phone for comment but could not be reached on Saturday afternoon.
