Asi tstandst oday ,OneUSdol larcost s92.

93Taka, wher easlast

Sept ember ,i
tusedt ocostar ound83Taka.Soi nt hepastni ne
mont hs,asi gni ficantdev aluationhasoccur redf ort he
Bangl adeshi cur rencyt aka. Thescenar ioi snotl ikelyt ot akeabi g
U-turnov ernight .Weal l hav eouropi nionsandweexpectt hatthe
gov ernmenthassomepl anst omaket hingsbet ter.Butwhyi sthi
s
happeni ngandwhatact uallydet ermi nest heexchanger ateofone
currencyf oranot her ?Sincet heendoft hegol dst andar di n1971,
themaj orityoft hewor ld’scur rencyhasadopt edoneoft wo
exchanger atesy stems-Fi xedexchanger ateandf loating
exchanger ate.fixedexchanger ateiswhenonecount rypegsi t
s
currencyt oanot hercur rencysot hatbot hcur renciesmov e
l
ikewi se.Usual lydev elopingcount ri
esseeki ngcur rencyst abili
ty
fol
lowt hissy st em. Af loat i
ngr at eisdet ermi nedbyt heopen
mar kett hroughsuppl yanddemandongl obal cur r
encymar kets.
Ther efore, i
ft hedemandf orthecur rencyi shi gh, t
hev aluewi ll
i
ncr easeandv i
cev ersa. Inther ecentpast , af i
xedexchanger ate
system waspr ev aili
ngi nBangl adesh.Toenhancet her esili
ence
oftheeconomy , Bangl adeshshi f
tedt oamar ket -basedexchange
rat
ef ortheTakai nMay2003knownast he‘ managedf loat’
system. Acur rency '
sst rengt hisdet ermi nedbydi ff
er entf actors
suchast hedemandandsuppl yofi tint hef oreignexchange
mar kets, infl
at i
on, growt hint hedomest i
ceconomy ,interestrates,
capital f
low, et c.Cent ral banksof tenbuyorsel ldomest ic
currenci est ost abi li
set heexchanger at e.Bybuy ingf or eignand
sell
ingdomest iccur renci es, t
heymakedomest i
ccur renci es
cheaperandv icev ersa.Wi thhighi nfl
at ion, thepowerof
purchasi ngdecr eases, andt hev alueofcur rencydr ops.For
exampl e, ifIndianpr i
cesgr owf ast er, demandsf orI ndi angoods
fallandt her eisl essdemandf orRupee. Ifacount ryspendsmor e
onf or eignt radet hani t
’sear ning, andt riest omakeupt hedef icit
bybor rowi ngf rom ot hercount ries, thei nv estorsar el ikelyt o
withdr awt hei nv estment sandt hev al ueoft hel ocal cur rencywi ll
drop. Agai n, i
ft hegov ernmentofacount r yisunderhugedebt ,it
causest her iseofi nflationwhi chev ent ual l
yleadst ot her emov al
ofi nv est ment sanddev aluationoft hecur rency.Nowl et ’shav ea
l
ookatt hepr esenteconomyofourcount ry.Bangl adeshi s
growi ngi tstradedef ici
tshar plyduet ot hei ncreasi ngv alueof
i
mpor t scompar edt ot heexpor tsont hebackofspi rallinggl obal
pricesofgoodsduet othepandemi candt heRussi a- Ukr aine
war .Atpr esent ,thet r
adedef icitismor et hanUSD27bi l
lion.Thi s
hugenumberhasal socausedt hecur rentaccountbal anceof
forei gnt ransact ionst opl unget omor et hanUSD15bi lli
on. To
maket hesi tuat i
onwor se, remi ttanceshav edecl inedbyal arge
scal ei nt hi sfiscal year.Thecent ral bankhasr el easedabout6
bil
lionofi tsr eser vetoav oidacr isi
s. Thus, thef oreignr eser veshit
thel owesti n18mont hsi .eabout42bi llion.Byi nt ernat ional
standar ds, acount rymusthav eatl eastt hreemont hs' wor thof
forei gnexchanger eserv est ocov erimpor tcost sandBangl adesh
onlyhasf ivemont hsofr eservel eftf ori mpor t
s.Mor eov er,the
dev al uat i
onoft het akameanspr icesofi mpor tedgoodswi l
lrise,
whi chwi llevent uallycausei nflationt oi ncr ease.Sot hecomi ng
day sar el ikelyt obemor edr eadf ulf oroureconomy .