Russo-Ukraine war impacts Bangladesh economy

The economic impact of war is terrible on any interdependent economy. Bangladesh being an import-dependent country is feeling the impact of the ongoing Russia-Ukraine war in various ways. It is a trading country and highly import-dependent for items like fuel and industrial raw materials. Many of our import-oriented companies are now facing challenges to open LCs (letters of credit) since banks are not interested in opening LCs due to a shortage of foreign currency. Moreover, taka depreciation against dollar has increased pressure on our foreign currency reserve. As a result, business costs are getting higher day by day and ultimately the expenditures are being passed on the consumers. Though the government and the Bangladesh Bank are taking initiatives for improving foreign exchange management, the current situation hardly shows any glimmer of hope.

The situation is expected to worsen further if the war lingers. Reduced exports and increased import bills are hitting the country hard, particularly as an oil-importing nation, we are already facing high import payments. The Russia-Ukraine war has posed significant economic challenges before Bangladesh, with declining foreign reserves, currency depreciation, and soaring import costs, leading to a severe dollar crisis and higher consumer prices. In this situation, the government must come out with a concrete plan in order to obviate the crisis for survival of all people even if the war continues further.

Rameza Rashed Rimthi,

Student of the Department of Management,

School of Business and Economics,

North South University, Dhaka,

ramezarimthi@gmail.com