Bangladesh taka sharply depreciates due to high import bill

25 Mar '22

2 min read

Pic: Shutterstock

The exchange rate of the US dollar on the interbank money market recently rose to Tk 86.2 amid pressure of a higher inflation on Bangladesh’s economy. The taka weakened further against the greenback amid a massive surge in import costs in this fiscal that prompted Bangladesh’s central bank to allow appreciation of the US dollar against the taka.

The exchange rate of the US dollar appreciated by 1.65 per cent to Tk 86.2 from Tk 84.8 at the beginning of August 2021.

Point-to-point inflation in February 2022 hit 6.17 per cent, 16-month high, as food prices have sharply gone up amid the prevailing high non-food inflation, according to Bangla media reports.

A depreciation of the taka would reportedly encourage exporters and discourage imports.

In the first eight months of FY22, the inflow of remittance dropped by 19.46 per cent, or $3.25 billion, to $13.44 billion from $16.69 billion in the same period of the previous year.

On the other hand, the country’s import payments rose by 46.23 per cent to $46.67 billion in July-January of FY22 against $31.92 billion in the same period of the previous year.

Though the country’s export earnings grew by 29.23 per cent to $27.98 billion in the first seven months of FY22 against $21.65 billion in the same period of FY21.

As a result, the country’s trade deficit rose to a record high of $18.7 billion at the end of January of FY22 against a deficit of $10.27 billion in July-January of FY21.

Fibre2Fashion News Desk (DS)

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