The exchange rate depends on the demand for foreign currency. The supply of foreign currency is decreasing because of a negative growth of export. As a result, the price of the Dollar is increasing while the Taka is devaluing.
The exchange rate of the Taka has now reached 84.90 per US dollar.
Under the circumstances, how can the finance minister maintain the current value of the Taka by force?
Imports should be decreased to stop the devaluation of the Taka. But, import of capital machinery and raw material for industry will decrease if we attempt to decrease overall import. This will have an adverse effect on our economy which might result in a decrease of GDP growth.
But exporters in the country have been demanding a devaluation of the Taka for some time now. They say export revenue will increase if the Taka is devalued. So we should not make statements such as, "Taka will not be devalued under any circumstances."
Now, the question is whether we should reduce import duty to maintain the volume of import after devaluing the Taka. But then we will have to deal with the fact that imports will increase if import duty is decreased, which will put more pressure on the exchange rate.
I think that identifying the reasons behind the decrease in exports is the best way to resolve the crisis over negative growth of exports. We have to progress with a short-term and a long-term plan for that.
We have to explore new markets by diversifying the export products. Buyers of readymade garments are now offering lower prices for products. So we have to take steps to increase price a little bit through negotiation.
If we can increase exports and remittance, we will not need to devalue the Taka.