Taka depreciates against US dollar marginally

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Siddique Islam
Bangladesh taka (BDT) has depreciated marginally by 0.40 per cent against the US dollar over a month following a rise in the demand for the greenback in the market.
"The local currency has depreciated against US dollar in line with the market demand," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
The depreciation of BDT has started since October 29 last following the increase of demand for greenback in the inter-bank foreign exchange market to settle import payment bills for petroleum products, fertiliser and food grains.
On October 19 last, the US dollar was quoted at Tk 68.52- Tk 68.54 in the inter-bank foreign exchange market against Tk 68.52 on the previous working day.
The US dollar was traded at Tk 68.77- Tk 68.80 in the foreign exchange market Tuesday against Tk 68.75- Tk 68.77 of the previous working day, officials confirmed.
"The US dollar has gained gradually against BDT in line with the global market trend," the official said, adding that the US dollar is gaining against other major currencies including Euro and pound sterling.
"We're monitoring the country's forex market closely to keep the market stable," the BB official said, adding that the central bank continued its intervention in the market by selling and buying US dollar directly and providing overdraft facilities to the banks.
On the other hand, market players said that the local currency should depreciate more against the US currency to encourage exporters as well as help increase the flow of inward remittances.
"The exchange rate of local currency against the US dollar will be re-fixed considering our competitors like India, Pakistan and Vietnam," a treasury official of a private commercial bank told the FE.
The exchange rate of Indian Rupee against US dollar in early December 2007 was Rs. 39.83 and it gradually moved up to Rs. 43.95 in September 2008, Rs. 47.83 in October 2008 and it was Rs. 48.66 on October 15 last.
On the other hand, the US dollar exchange rate against Pakistani Rupees was Rs. 60.90 in early December 2007 and went up to Rs. 75.71 in early September 2008 and it touched Rs. 77.84 by the end of October.
The depreciation of BDT will not affect heavily the inflationary pressure on the economy as falling trend in prices of commodities in the global market, he observed.
A senior official of a leading foreign commercial bank in Bangladesh, however, said that the local currency should not move against the US dollar widely because the BDT is not convertible in capital account.
He also said Indian Rupee is more correlated with the BDT than Pakistani Rupee in term of real effective exchange rate.