BD Currency devalued record high against US Dollar at more than 100 BD Taka

 

Photo Credit: Pixabay

The value of the Bangladeshi currency Taka is declining against the US dollar continuously. In just a day's time, the US dollar price in the open market rose to a record high for the first time at Taka 102 by increasing 4 Taka suddenly.  Rising dollar prices due to declining supply in the open market. Importers or exporters are not benefiting from this increased dollar price. Even then the money exchangers of the curb market are not able to supply enough dollars.

Yesterday Bangladesh Bank depreciated the US dollar against Taka in a week due to rising demand and crisis. The exchange rate per US dollar was increased by 80 Paisa (fraction of Taka)  to 87 Taka 50 Paisa.

After observing the carb market, it is seen that one has to pay 100 to 102 BD Taka to buy one dollar from the market. BD Taka has Never before exceeded 100 BD Taka against one  US Dollar. The Dollar crisis has been created for various reasons, including a huge growth in imports, and remittance reduction. Last August Reserves, which surpassed 48 billion US dollars, are now down to 41 billion US dollars. To fulfill import liability, one has to buy dollars at the high rate of up to Tk 98, which can lead to an increase in the price of goods drastically.

Meanwhile, Bangladesh Bank last Monday (May 16) fixed the dollar rate at 87 BD Taka 50 Paisa but the commercial banks are not abiding by the rate. Now to do an LC ( Letter of Credit)  in the bank, 92 to 93 BD Taka are being taken against the dollar. Some banks are also reportedly taking BD Taka 95/96.

Admitting that dollars are being sold in the market at a higher price than the central bank's fixed-rate, Bangladesh Bank's executive director and spokesman Sirajul Islam said, "We have also received similar complaints. But imports are more than our export earnings, which has put pressure on the dollar. For this reason, Bangladesh Bank is supplying dollars according to the demand of the banks. So far, more than $5 billion has been sold against the demand of banks.

Those involved in the sector said that on the one hand, the pressure of imports has increased on a large scale in the country. As a result, it takes extra dollars to pay the import liability. But in comparison, remittances and export earnings have not increased. As a result, the pressure on the US dollar in the banking system and the open market is increasing. This has led to a shortage of foreign exchange supplies. As a result, the price of the dollar is rising against the BD Taka. The central bank is selling dollars against the demand of banks to keep the market stable. This is reducing the foreign exchange reserves. But still the dollar cannot be controlled.

According to market analysis, the dollar was stable at 84 BD Taka  80 Paisa in the interbank currency market from July 2020 to August last year. But since then, the dollar crisis has started to pay for large import expenses. This has continued so far.

A record amount of dollars has been sold in the country. The central bank has sold a total of 5.02 billion US dollars to various banks till May 12 of the current 2021-22 financial year. Earlier, the central bank had set a record by buying dollars in the last financial year to keep the market stable. According to the data, in the fiscal year 2020-21, Bangladesh Bank bought a total of about 8 billion dollars from the banks.

Meanwhile, due to the continuous sale of dollars under the pressure of imports, the pressure on foreign exchange reserves is increasing. According to the central bank's latest data, the reserves had crossed the $48 billion mark on August 24 last year, breaking all previous records. The country's reserves fell to 41.93 billion on May 11, 2022.

Currently, imports have increased over exports to the country. According to Bangladesh Bank data, exports increased by 32.92 percent in the July-March period of the current financial year 2021-22. Imports, on the other hand, increased by 43.86 percent.

Meanwhile, imports have increased due to high economic activity after the pandemic. At the same time, the prices of imported goods have also gone up. Altogether, the cost of imports has increased. From July-February of the current financial year, the import expenditure has increased by 47 percent and the opening of LC has increased by 50 percent.

Meanwhile, the difference between the dollar price in banks and the open curb market has exceeded BD Taka 8, which is feared by bankers to increase the income of expatriates through illegal means. Because the difference in the value of the dollar has never been so great before.