Taka continues to depreciate against US dollar20 November 2015 bdnews24.com
The local currency has depreciated by 1.25 percent against the US dollar in the space of a month. Experts, however, consider it a good sign for remittance and export earnings.
On Oct 15, $1 was available at Tk 77.80 in the inter-bank currency market. But on Wednesday, it shot up to Tk 78.77. According to Bangladesh Bank's data on foreign currency exchange rates, the taka is sliding by seven to 10 paisa against the dollar every day. A decline in export earnings and remittance inflow is the main reason behind the depreciation of the taka, thinks Kazi Saidur Rahman, general manager of the Forex Reserve and Treasury Management department of the central bank.
"There is nothing to be worried about … There is no [supply] shortage of dollars in the market. $75-76 million was traded in the inter-bank currency market even on Monday," he told bdnews24.com. "When the Indian Rupee, Russian Rouble and Euro were sliding significantly, the Bangladesh Taka remained stable. Now it is depreciating a bit due to a hike in the demand for US dollars."
"We have enough reserves. If required, we will sell from there as [we did] before," the BB official added. The depreciation has been triggered by a rise in the cost of heavy equipment import for large-scale government projects, according to economist Zaid Bakht.
"The country has a huge reserve. So it will not create much of a problem. Rather, the depreciation will help boost export earnings and remittance inflow," he said. Now people will get more money in taka from the remittances sent in foreign currencies. The same will happen in the case of export earnings.
In the first four months of the current fiscal year, the country received $50.2 million in remittance, 16 percent less than the inflow during the same period in the last fiscal. However, export earnings in the same period increased by five percent to stand at $10.13 billion.