Bangladeshi exporters and importers can save a handsome amount of foreign currencies annually by switching over to multicurrency exchange-rate system from the existing US dollar-dominated international trading regime.
How such higher benefits from foreign trade can be reaped was shown Tuesday at a seminar on 'Currency Management Exposure', organized by Bangladesh Garment Manufacturers and Exporters Association at its headquarters in the city.
Present among others were former deputy governor of Bangladesh Bank Abul Kashem, BGMEA president Md Atiqul Islam, former banker and BGMEA adviser Mamun Rashid and representatives from banks and apparel makers.
The trade-weighted system is developed by a Danish firm, Global Currency Union (GCU).
And the seminar was organized following the GCU's proposal to introduce the trade-weighted system to the central bank that suggested discussing the matter first with the stakeholders like BGMEA, BKMEA, BTMA, BIFT and BIBM.
"The direct economic value which the GCU exchange rates can contribute to improving competitiveness of Bangladesh is $380 million per year," Jesper Toft, the founder of the GCU, said while presenting his keynote paper.
By using the trade volumes and relative currency values, the system will provide the best-achievable stability for monetary value, trade and investment while still being dynamic, he added.
The system requires no intervention from the central bank to maintain optimal stability, he told his Bangladesh business audience, adding that any excessive movement in the exchange rates will be balanced out and subdued by the currencies in the system.
Bangladesh's industry can greatly benefit from the system in case of exchange-rate stability as it will provide the most stable exchange rate, said the innovator of the alternative currency exchange in trade settlement.
It will also contribute to economic development and financial stability, he added.The BGMEA president noted that the local currency is getting stronger against the US dollar while that of other competitors getting weaker, leaving the businesses in an adverse situation on the overseas market.
"As a result, we are losing our competitiveness," he said, calling for a currency-management system in order to sustain the competitiveness.
munni_fe@yahoo.com
