Taka loses further ground vs dollar

The local currency yesterday depreciated further against the US dollar, hitting Tk 92 for each greenback in the interbank platform.

The exchange rate of the taka stood at Tk 91.5 per dollar on Monday after facing a depreciation of Tk 0.45.

Now, the local currency has suffered another dip of Tk 0.05, marking the 11th time this year that it has been depreciated.

Bangladesh Bank also injected $129 million into the market yesterday to help banks settle their import bills, a central bank official said.

The central bank supplied a record $6.46 billion to the market between July 1 and June 7 this fiscal year.

Despite that, the foreign exchange market is still facing a shortage of US dollars due to soaring import payments and declining trend of remittance.

The country's import payments have shot up since the end of last year because of the rising price of commodities in the global market.

The pent-up demand after the height of the Covid-19 pandemic initially played a pivotal role in pushing up commodity prices. The pandemic had disrupted the global supply chain, deepening the crisis.

Besides, the Russia-Ukraine war has worsened the situation further.

Against this backdrop, the country's import payments escalated in recent months, creating an immense pressure on the taka against the dollar.

Between July and April this fiscal year, imports went up by 41 per cent to $68.66 billion, while exports grew 35 per cent to $41.10 billion. This resulted in a record trade deficit -- the gap between exports and imports -- of $27.56 billion, up 53 per cent year-on-year.

Moreover, remittance inflow fell 15.95 per cent year-on-year to $19.19 billion in the first 11 months of this fiscal year.

All these led to the decline in foreign exchange reserves to $42.11 billion on June 1 against $46.15 billion on December 31 last year.