We have been seeing interest rising trends everywhere, not just in the United States or the European Union. But in the context of Bangladesh, it will further stoke inflation.
In this situation, we have to first take people's interest into consideration. For that, we need to gradually adjust the dollar rate with our local currency and take it to a tolerable level. As our economy is not so strong, we have to calculate a lot of things. We need to be careful about so many challenges ahead.
However, the Fed's interest rate hike will not have a direct effect on us. Our taka will either be appreciated or depreciated based on international dollar rates.
But we are moving forward cautiously. Any abrupt depreciation of taka will cause the economy to suffer a setback. That is why the Bangladesh Bank is doing it slowly at a tolerable level.
I think we will have better days ahead because remittance inflows will go up centering on the upcoming Eid-ul-Azha. The dollar market is now somewhat stable.
The more taka depreciates, the more exports will be discouraged. So, we now have a process going on to encourage exports and remittances. Imports of luxury items are being discouraged.
Banks are no longer under the pressure of the dollar crisis. The kind of dollar crisis that existed in the banks a few days ago is no more. Whenever there is a dollar crisis, the Bangladesh Bank steps up with dollars.
To keep the dollar market stable, the central bank injected $7 billion into the banking system in the last few months, which is unthinkable.
Mohammad Shams-Ul Islam is the Managing Director of Agrani Bank