Garment manufacturers in Bangladesh are ending up paying more for import of raw inputs like cotton, yarn and chemicals, owing to depreciation of the Bangladesh taka (TK) against the US dollar.
Bangladesh imports all its requirement of cotton, the basic raw material for making fabrics and apparels, from other countries, which affects the cost of production of garment manufacturers.
The value of a US dollar fluctuated in the range of Tk 68 and Tk 70 for nearly 6 years. However, its value has been depreciating since mid-2011 and touched Tk 85 this week.
Although the decrease in the value of the currency benefits exporters, Bangladesh would have to face several difficulties as it is basically an import-dependent country.
Economists say poverty may increase if Bangladesh fails to keep the exchange rate under control.
They add that the growth in the country's net exports is not big enough to drastically reduce its trade gap.
Fibre2fashion News Desk - India
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