Bangla Currency Devalued By 45 Paise

The taka has been devalued by 45 paise, or about 1 per cent, to stop depletion of the countrys foreign exchange reserve and make Bangladesh exports more competitive in the international market. The new rate was to come into effect from yesterday.

The last devaluation of the taka was done in the second week of February. With the latest adjustment, the taka has been devalued six times by 2.5 per cent in last six months, official sources said.

The selling rate of one US dollar now has been fixed at Taka 43.10 while the buying rate will be Taka 43.30.

 

The previous selling rate was one unit of the Greenback for Taka 42.65 and buying rate Taka 42.85.

The devaluation came two days after leaders of the Bangladesh Garments Manufacturers & Exporters Association met finance minister S A M S Kibria and suggested that the taka be devalued to make Bangladeshi garments, the countrys number one export earner, competitive in the international market.

The association leaders also apprised Kibria of the problems faced by the garments sector including stock lot and bank charge.

Lutfar Rahman Sarkar, the governor of Bangladesh Bank, the countrys central bank, said on Tuesday night that the downward adjustment of the taka against the dollar was aimed at encouraging local exporters who needed some support.

Sarkar, however, maintained that the countrys foreign exchange reserves were almost stable and constant. Economists said the devaluation would reduce import demands.

They said more devaluation was needed to increase exports by making Bangladeshi goods more competitive.

A senior Bangladesh Bank official said the countrys foreign exchange reserves stood at $1,765 million on March 13, a sharp drop from $1,908 million on March 6.

The foreign exchange reserves are in a very bad position. The country has only a reserve by which import bills for less than two and a half months can be paid, he said. The depletion was because of a payment to the Asian Clearing Union (ACU).

The official said he feared that the foreign exchange reserves would not increase substantially if there was no aid disbursement within a short time.