** We see no end to overwhelming lawlessness everywhere: Problem is muscle politics ** Remittance dips 15pc amid forex crisis ** Lawyer’s six bank accounts frozen ** CEC assures OECD envoys to hold inclusive, acceptable polls ** Exports hit record $ 52b in outgoing fiscal year ** Visitors suffer from online ticketing at Nat’l Museum ** Govt to lower age bracket for children to punish teen gangs ** Motorcycles on Padma Bridge not allowed before Eid-ul-Azha ** SSC likely to be in August ** Environment is absent for participation of girl students at colleges and universities ** City residents yet to get respite from waterlogging ** Plastic mini packs harming health, environ severely ** US to send Ukraine advanced surface-to-air missile systems ** Padma bridge Record collection of Tk 3.16cr in one day ** Country reports 6 more Covid deaths with 1,105 cases ** Another killed in road crash in Padma bridge area ** A huge quantity of local and foreign currencies, gold and silver jewelries in 16 sacks were found from the charity boxes of Pagla Masjid in Kishoreganj. Several hundreds including people from district admin, banks as well as madrasa students participated in counting the money and assorting the wealth. After every three months, the boxes are opened, but this time they were opened after 110 days and found Tk 3.60 crore. Last time, about Tk 4 crore, foreign currencies as well as gold jewelries were found from the mosque’s charity boxes. NN photo ** Padma Bridge Khulna Railway Station missing passengers’ hustle-bustle ** BB's monetary policy inadequately addresses inflation ** Long tailbacks on toll plaza as all booths were not operational ** Eid advance train ticket sales begin ** Flood is likely to be prolonged ** Foreign envoys in Dhaka remember those killed ** 1,500 militants arrested since Holey Artisan attack: RAB DG ** DGHS reports 5 more Covid deaths, 1,897 new cases **

Strengthening of taka artificially may leave an adverse impact on macro economy: Experts

23 May 2022 Editorial Desk
Strengthening of taka artificially may leave an adverse impact on macro economy: Experts

The taka faced less depreciation against the US dollar compared to other South Asian currencies in the last one year, eroding the export competitiveness of the country against its peers. This seems that Bangladesh has been trying to tackle the ongoing global economic crisis by strengthening its currency artificially but it may leave an adverse impact on the macro-economy, warn experts. The currencies of South Asian countries except the Maldives experienced a devaluation of between 6.06 per cent and 79.82 per cent in the past one year whereas the taka weakened by 3.18 per cent.

All currencies in South Asia, which consists of Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka, are now under pressure like other currencies in the rest of the world due to the global supply chain disruptions and pent-up demand. The pandemic has spawned the crisis and it has now been exacerbated by Russia's invasion of Ukraine.
Among the countries, Sri Lanka is facing an acute foreign exchange crisis, which has already forced its prime minister to step down. Pakistan's foreign exchange regime is witnessing volatility as well. Amid the volatile situation, the Bangladesh Bank is now giving all-out efforts to keep the foreign exchange market stable by weakening the local currency to some extent, ignoring the natural course of demand and supply.

The central bank has depreciated the taka five times this year, but the initiatives were not enough given the surging import payments, which have already generated a record trade deficit. Before the outbreak of the latest financial crisis, the central bank had not depreciated the taka significantly. The rate stood at Tk 84.80 per USD in May last year.

Bangladesh has tried to strengthen its currency artificially, so the ongoing global volatility has created enormous pressure on the taka. Before the outbreak of the latest financial crisis, the central bank had not depreciated the taka significantly. The peer countries of Bangladesh have been devaluing their currencies gradually over the years, whereas the BB has not followed the same path. The global financial trend is becoming worse day by day and we must be prepared to tackle the looming danger of economic recession.

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