The value of Taka was declined hugely due to serious pressure of price appreciation in last 15 years of former Hasina government. The market of US dollar had no rein at all. Currency market, capital market and dollar market— all these three sectors of economy were about to be on the brink of destruction. The value of dollar was Tk 67 earlier, which escalated to an alarming number of Tk 120.The bleak picture in overall economy entailed big crisis in trade and commerce of the country.
According to the analysts, in the 15 years of Awami League led government, crores of dollars were siphoned off the country and anarchic situation was created in banking sector. Due to the unprecedented corruption in currency market, more than a dozen of banks had become about to be bankrupt. A few banks were compelled to be in the process of merger. In the last phase, these banks didn’t have the supply of cash, and as a result, they had to close all of their transactions.
The influential people of Hasina's government also looted Tk of thousands of crores from the capital market, all of which has been laundered to abroad. LCs was closed due to dollar crisis. As a result, the leading business organizations of the country had to struggle to run their business operations.
In October 2008, the amount of defaulted loans in the banking sector in the country was Tk 18 thousand crores. After Awami League had come to power in 2009, the amount of defaulted loans was increased by about Tk 2 thousand crore in October of the same year. This unwanted growth rate had not stopped. The amount of defaulted loans has increased every year. The tendency of looting money from the banks was also increased. The bank has been bankrupted due to the activities like taking loans with fake documents. Irregularities and frauds reached such a level that the banking system is left in the hands of predatory partners. They have looted money from banks by approving new banks. Its pressure falls on the entire economy of the country. State-owned banks were turned into centers of looting. Bank money is looted and converted into dollars and billions of dollars were siphoned off.
When Awami League came to power in 2009, the price per dollar was Tk 67. This rate increased until 2011 and the dollar exchange rate fluctuated between Tk 69 and 70. Since 2012, the price of the dollar has jumped to Tk 76. In 2014, the dollar market became unstable during the second term of the Hasina government. Dollars were freely laundered from the bank using various fraud-techniques. The government tried to meet this deficit by bringing in foreign loans. The currency was devalued several times. However, this didn’t improve the situation, but rather helps the money launderers. The dollar crisis was increasing, along with the dollar rate.
In October 2017, the dollar rate was Tk 80, in 2020 it was Tk 83, in 2021 Tk 85. After that in 2022 the dollar rate reached even Tk 100 within no time. The situation became completely out of control. There was an extreme crisis of dollars. In 2023, the dollar rate in the open market will go up to Tk 130. After that, the dollar fell slightly due to the contractionary policy of the central bank. When Bangladesh Bank introduced the crawling system, the dollar rate fluctuated at Tk 120.
In 2016, several major fraud cases were revealed in the banking sector like Sonali Bank-Hallmark Scam, Basic Bank Scam. About Tk 10 thousand crores lost in two incidents came to light. This created extreme anarchy in the banking sector. The entire money of this fraud was converted into dollars and siphoned off to Dubai and Singapore. The country's economy was in dire crisis of inflation. The government took steps to encourage rather than prevent this anarchy. Those involved in the robbery of Tk of thousands of crores were placed under the leadership of the bank. The management of the banks was handed over to those against whom there were major corruption allegations. Thousands of crores of Tk were looted from state-owned banks. Even if the export was shown through LC using false declaration, and the value was siphoned off without bringing it to the country. As a result, the value of money was reached to the bottom as the value of the money continued to decline.
In January 2010, the price of gold (22 carat) in the country was Tk 32 thousand 892, which became Tk 1 lakh 12 thousand 440 in January 2024. In other words, the devaluation of money in 15 years has increased the suffering of common people terribly. In 2010, the thick rice was Tk 24 to Tk 26 per kg. Now it is over Tk 60. In 2010, a kg of beef was between Tk 300 to Tk 320. In 2023, its price has been over Tk 800.
The previous government printed new money and took loans and used it in the development budget, putting the country's economy in grave danger. About 70 percent of the country's businesses have been affected due to rising costs and weak demand-chain. A survey of more than 25 multinationals, local large companies, startups and 167 companies in the SME sector about the country's business situation has said that apart from the large devaluation of the currency, financial irregularities, high salaries, cash shortages and reduction in savings have resulted in various financial challenges in businesses. Rising costs and shortfalls in operating cash flow have left companies facing major losses. Many private companies are also currently facing losses due to volatility in the foreign exchange market. Such losses are increasing due to sharp devaluation of Tk against the dollar as well as delayed LC payment settlements, said the sector-stakeholders. The companies with maximum risk are the companies that have foreign debt and are largely dependent on imports of raw materials for manufacturing process.
When asked, the former chief economist of the Dhaka office of the World Bank Dr Zahid Hossain told The Bangladesh Pratidin, “Due to this high rate of dollar, the inflation of the country has hugely impacted the country’s economy. It has made life difficult for common people. This consumers’ dilemma has not yet changed. Big defaulters benefited as they had no problem with inflation. It has affected the economy of the country, the common people of the country.”
(The report was published on print and online versions of The Bangladesh Pratidin on October 7 and rewritten in English by Lutful Hoque Khan)
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