In the face of a worldwide economic downturn, multiple countries are grappling with currency depreciation against the US dollar. Bangladesh witnessed the highest depreciation rate among its rival nations during the first nine months (July-March) of the previous fiscal year. Taka depreciated by approximately 12.5 percent against the dollar, a figure that climbed to over 26 percent by the end of June.
The latest quarterly report from Bangladesh Bank reveals that India, China, Vietnam, and Indonesia—countries with which Bangladesh competes in international trade—also experienced currency depreciation during the first nine months of FY 2022-23. However, their depreciation rates ranged between one and four percent, significantly lower than the devaluation observed in the Bangladeshi currency.
According to the data, the average exchange rate of the Bangladeshi currency against the dollar at the beginning of the previous fiscal year was around Tk 93, which reached Tk 104.66 by the end of March—a depreciation of 12.5 percent. India’s rupee experienced a further devaluation, depreciating by 3.98 percent from July to March, while China’s yuan depreciated by 2.53 percent over the same period. Vietnam’s dong and Indonesia’s rupiah experienced depreciations of 1.58 percent and 1.42 percent, respectively.
Although the currencies of the Philippines and Cambodia were stronger against the US dollar, their overvaluation was relatively modest. The Philippine peso appreciated by 1.09 percent, and Cambodia’s Cambodian riel exhibited a 0.96 percent overvaluation during the same nine-month period (July-March).
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