Whose fault is it that one dollar is now equal to 117 taka?

Whose fault is it that one dollar is now equal to 117 taka?

1 minute, 25 seconds Read

After a lot of trials, tests and moves, Bangladesh Bank finally accepted the IMF's conditions and adopted a new foreign exchange system. The crawling peg is not completely market-based. The dollar will remain at a moderate rate, like currently 117 taka. The exchange rate will remain around this. It is not that this will solve all the problems, but the uncertainty about the dollar rate and expectations of appreciation will be controlled to some extent.

Bangladesh made the biggest mistake regarding dollar rates in the three years before Covid. At that time most of the countries had devalued their currency, but Bangladesh did not let the dollar rate rise. The second mistake happened after the Covid outbreak. At that time the demand for dollar was low globally.

Foreign exchange reserves had just started to increase due to good export conditions and low import demand. At that time too, the rate of Taka was kept stable.

The third mistake started after the Ukraine war in 2022. Actually, then the price of the mistakes of the last two years had to be paid. Even then the exchange rate was not left to the mercy of the market and all kinds of strategies were adopted. The result was that there was a huge decline in reserves and the price of the dollar rose.

Despite all this, the government failed to control inflation. Therefore, even after adopting the new system in exchange rates, it was too late. Now the question is whether this crisis will end soon.

* Shoukath Hossain is the online head of Prothom Alo

*This column was published in the print and online editions of Prothom Alo and has been rewritten for the English version by Ayesha Kabir.

65 Total Views 65 Views Today
Spread the love

Similar Posts