Exporters hit by euro fall to get spl cash stimulus

Rezaul Karim | Published: March 28, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

The government moves to provide special cash stimulus to the exporters who mainly send their products to Europe amid continuous depreciation of the euro, officials said.Â Â
Besides, the prolonged political turmoil on the home front is also cited as factors affecting the country's external trade.
The ministry of finance (MoF) took a decision Monday to dole out the affected exporters who have been exporting their commodities amid erosion of the euro value in the wake of wake of what is seen as eurozone syndrome in the world economy.
In this connection, the monitoring cell of the Finance Division has sent a letter to the ministry of commerce (MoF) asking for information of different export items that go to the European Union (EU).
It seeks list of readymade garment, textile and other products along with importing countries in the EU.
Also to be furnished is information about earnings in the first six months of current fiscal year against exports to the eurozone, along with earning statements for last three years.
Data of present export orders of apparel, textile and other items will also have to be provided, the letter reads.
Besides, the MoF has requested the commerce ministry to give detailed opinions and recommendations as to whether the export of Bangladesh apparel, textile and other items faced any difficulty on the EU market due to devaluation of the euro.
A competent source hinted that affected exporters might get 2.0 or 3.0 percent cash incentives. "But it will take time to reach a fruitful decision."Â Â
The country's export earnings, especially from the EU market, have been affected due to continuous depreciation of the 19-nation-shared currency, the official currency of eurozone, industry-insiders said.
According to them, continued fall of the euro value against the local currency, Bangladesh taka, and the prevailing political turmoil are hampering export of readymade garments (RMG), leather and leather goods and frozen foods from the country.
Abdus Salam Murshedy, Managing Director of Envoy Group, pointed out a three-pronged problem: depreciating euro and dollar and domestic political unrest.Â Â Â Â Â Â Â
"Naturally, a large volume of export earnings from the EU zone will decrease due to fall in EU prices. On the other hand, price of the dollar on the domestic market declined," he told the FE. Â
"As a result, export oriented industries are faced with severe challenges," he added.
The leading businessman mentioned that the price of one Euro was Tk 106 to Tk 108 a year ago but its price was now hovering around Tk 86 to Tk 88.
He said the euro price decreased more or less 20 per cent in one year.
"The apparel exporters have demanded from the government 3.0 per cent cash incentives to increase competitiveness as the 27-member eurozone remains largest export destination especially for apparel sector," he noted.
"We can call it crisis-period assistance," said the former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president.
"We think that the move is time-befitting as well as reasonable. It should be implemented urgently for the sake of country's employment and overall economy," added Mr Salam Murshedy, currently president of the Exporters Association of Bangladesh (EAB).
"We did not get the letter yet. But the government may consider if the exporters to the EU are victims due to drop in euro price," Hedayetullah Al Mamoon, senior secretary of the commerce ministry, told the FE.
According to the Export Promotion Bureau (EPB), Bangladesh fetched $9799.80 million in July-January period of FY2014-15. Â
Currently Bangladesh's main exports to the EU market are garments, jute and jute-related goods, leather, frozen fish and seafood.
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