Bangladesh is grappling with a scarcity of foreign currency as the interbank exchange rate for the US dollar reaches a record high of Tk 108.75 per dollar. Data from Bangladesh Bank reveals that banks traded each dollar within the range of Tk 108.50 to Tk 108.75 on May 22, 2023 marking a 24.28% decrease compared to the previous year.
The local currency has been experiencing depreciation due to increased import payments, slower export earnings, and reduced remittance inflow. Import bills for the first nine months of 2022-23 declined by 12.33% YoY, resulting in a 41.6% YoY reduction in the trade deficit. Remittances also dropped by 16.27% YoY in April. However, the executive director of the Policy Research Institute of Bangladesh, views the depreciating interbank exchange rate as a positive development, emphasizing the importance of allowing market forces to determine the exchange rate. Bangladesh’s foreign exchange reserves stood at $30.18 billion on May 18 2023, a 28.5% YoY decrease.
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