‘Local conglomerates lost Tk 65,000cr for dollar price hike’

Bangladeshi conglomerates counted Tk 65,000 crore in losses in the last one year because of the fall of the local currency against the US dollar, which made loans costlier amid global economic volatility, a noted economist said today.

Previously, the businesses used to spend Tk 8,200 to buy each $100, but the same amount of the American greenback has been costing them Tk 10,500 in the last one year, said Ahsan H Mansur, executive director of the Policy Research Institute (PRI).

So, the dollar remained the same but the taka devaluated and the corporate houses had to pay more for purchasing the American currency, he said.

He spoke at a roundtable on 'Monetary Policy 2022-23' organised by the Institute of Chartered Accountants of Bangladesh (ICAB) held at its office in Dhaka.

Humayun Kabir, former ICAB president, moderated the discussion.

Many local big conglomerates lost Tk 400 crore to Tk 500 crore in the third and fourth quarters of the current fiscal year as the real trouble of the devaluation of the taka against the US dollar started in June last year.

The more dangerous fact is that the corporate houses lost 90 per cent to 95 per cent of their profitability because of the volatile exchange rate of the US dollar, said Mansur.

Moreover, Bangladesh lost $14 billion from the financial account over the last one year because of a lack of proper management of the economy, the economist also said.

For instance, historically financial account in the balance of payment of Bangladesh has experienced $14 billion surplus almost every year, but last year the balance in this account became negative.

Some $13.7 billion was surplus in the financial account in 2021 and in 2020 the surplus amount was $14 billion, he said.

The economist suggested for resolving the dollar crisis immediately so that the economy does not suffer any longer as the opening of the letters of credit also dropped due to a shortage of dollar in the banking system.

In this case, he also suggested for introducing floating exchange rate instead of the rate managed by the central bank.

Shubhashish Bose, CEO of ICAB; Zakir Hossain, business editor of the daily Samakal; Muhammad Abdul Mazid, former chairman of the National Board of Revenue, and Jamaluddin Ahmed, former ICAB president, also spoke.