Reforms following the IMF prescription should not harm disadvantaged groups
The proposition that Bangladesh will move away from the US dollar-based payment settlement to a new international payment settlement is of no economic substance.
Bangladesh Bank’s foreign exchange reserves invested in US dollars declined 34 per cent year-on-year to $23.63 billion in February as the country is heavily dependent on the American greenback to settle payments for global trade.
Dealing with these two major challenges is essential for macroeconomic stability
Bangladesh Bank Governor Abdur Rouf Talukder has said there will be no foreign exchange crisis from January 2023, as the country's exports and remittances are in surplus compared to imports.
Ever since Sri Lanka and Pakistan’s economic turmoil, Bangladesh’s foreign exchange reserves has become a part of public discourse. So much so that despite having an official figure from the central bank every week, people are speculating.
Import bills rose 63 per cent year-on-year to $7.66 billion in July but it declined from a month ago, signalling the easing of international payment pressure thanks to the recent Bangladesh Bank efforts to cool down the volatile foreign exchange market.
The US dollar is on a tear, strengthening around 11 per cent since the start of the year and – for the first time in two decades – reaching parity with the Euro.
The rise in fuel prices is an illogical decision that will only harm ordinary citizens and fail to deal with the root causes of the crisis that Bangladesh is currently facing.