I appreciate that mopping up almost half a billion dollars from the market is in the interest of the exporters and the people who remit money home, but since our economy is heavily import-dependent, surely there would be considerable benefit in a stronger Taka?
There would be some depreciation once again when economic activities pick up and L/Cs for capital machinery start being opened -- possibly under a political government -- so why not allow economic forces to follow their natural course and allow the Taka to strengthen, taking advantage of these unusual circumstances?
I realize that the export lobby is very powerful and vocal, but there's also the disappearing middle class of the country to consider: Those who saw their savings plunge more than 40% in value in real terms (against major foreign currencies) over the last two-and-a-bit years.
Surely putting a rueful smile on their long-suffering faces counts for something?
They're not to blame for the previous regime's profligacy and kleptocracy in sucking the banks dry, driving up costs of infrastructure projects to absurd levels, printing money to finance them, and then siphoning off eye-watering billions of dollars to safe havens overseas, thereby causing the local currency to fall through the floor, are they?
And of course, there's the question of the persistent inflation that keeps hanging around like a bad smell.
We've heard lots of economists of every stripe come up with theories on just what's causing it and why we can't seem to get a handle on it, but one thing they've all agreed on is this: A significant part of it is imported.
The rising cost of imported items in taka terms, as the local currency lost its value, has driven up prices in the local market. The planning, finance, and central bank people have all been saying controlling inflation is their number one priority till they're blue in the face: Why not take an action that will match their rhetoric?
Let the Taka gain strength, I say. A free-floating currency, isn't that what we promised the IMF?
Let it appreciate against the US Dollar, the British Pound, and the Euro. It will help the Taka go a bit further when the little man on the street goes shopping.
Give the forgotten middle class something to be happy about. And it will be wonderful for the national confidence at a time when we sorely need good news.
How does Tk105 to the dollar sound?
Tanvir Haider Chaudhury has worked as a development activist, a research associate, a project coordinator, an economist and a senior banker. He is currently running a branded food company. He occasionally contributes opinion pieces to various periodicals.
