The ongoing dollar crisis has hit the macro economy of the country. Severe anarchy in the money market has been prevailing for more than two years. The price of the US dollar was Tk 93-95 in the first week of June last year which is now Tk 108. The price of the dollar is much higher in the kerb market. Before the Russia-Ukraine war in February 2022, the price of the dollar was Tk 85-86.
On the other hand, the country’s forex reserve was $42.2 billion till May 31 last year. Bangladesh’s current reserve is $29.9 billion. Although the government took various steps to overcome the dollar crisis, none become successful.
In the national budget for the 2023-24 fiscal year, Finance Minister AHM Mustafa Kamal mentioned six techniques to control the money market. These techniques are import restrictions for one more year. This restriction will continue for one more year. Explore new export destinations. Although, the government has been saying about new export destinations for several years. The finance minister directed to find a new regional export market out of Europe and the United States.
The government will also continue the incentive for sending remittances as this incentive is playing an effective role to send remittances in the legal channel.
Meanwhile, the finance minister announced to continue government assistance to boost domestic production. Steps will be taken to stop money laundering. Kamal thinks the risk of money laundering has decreased due to restrictions on import and export.
Besides, initiatives have been taken to reduce the monopoly of the dollar in import and export. Discussions are going on for alternative currency payment by Indian Rupee and Chinese Yuan. The finance minister mentioned the issue in his budget speech.
The finance minister said the government has given import restrictions on unnecessary and luxurious products to refix the reserve fund and ensure a stable money exchange rate. The restriction will be continued, he said.
As a result, import has reduced by 12.37 per cent in the first nine months of the current fiscal year. Besides, the cost-reduction policy of the government has remained active for the last 1.5 years.
The government thinks instability in the money market has slightly reduced. “We will keep aware in the next budget and a cost-cutting policy will also be taken,” he added.
Former adviser to the caretaker government Dr AB Mirza Azizul Islam told Bangladesh Pratidin that the dollar crisis must be removed to make the money market stable. “We have to increase export earnings and take effective initiatives to boost remittances. The government will have to take more stern action to tackle money laundering. Otherwise, there will be no result of the budget announcement.”
@ The article was published on print and online versions of The Bangladesh Pratidin on June 6, 2023 and has been rewritten in English by Golam Rosul.
