Bangladesh’s currency value fell by 0.22% to Tk78.7 per USD this week, breaking a steady rate of Tk78.50 since January, thanks to the rise in import expenditure.
The value of local currency was depreciated slightly on the market demand, said Allah Malik Kazemi, change management adviser to Bangladesh Bank.
He said the increased credit growth signals that the import is on the rise, causing demand for US dollar in the market. As a result the currency value fell slightly which will be beneficial from exporters.
Bangladesh Bank did not intervene in the current depreciation of taka, he said. The currency value against per dollar was at steady rate of Tk78.5 during the month of January.
The central bank has previously depreciated inter-bank exchange rate by 0.90% to Tk77.8 from November through December last year, after keeping the rate steady at Tk77.5 throughout first ten months of 2015.
Bangladesh Bank uses this inter-bank exchange rate for purchase and sale transactions with the government and different international organisations.
Bangladeshi Taka, however, has not depreciated enough in comparison with its global trading peers. Taka devalued by 0.9% in 2015 in comparison with Euro by 10.7%, British Pound by 4.9%, Yuan by 4.1%, Indian Rupee by 4.1%.
In addition, China has further devalued its currency in 2016 which is going to make its apparel cheaper for European buyers and US.
The private sector credit growth jumped to 14.19% at the end of December last year after constant growth between 10% and 13.7% in last three years, according to the Bangladesh Bank data.
Import expenditure came back to upward trend in recent months that reached 5.77% in November last year.
The country’s remittance inflow witnessed a sharp fall in the first month of current year compared to the previous month due to global recession amid falling oil price.
The remittance dropped by 12.23% to $1.15 billion in January from $1.31 billion in December last year.