Fibre2Fashion: A rapid depreciation of emerging market currencies, including the Indian rupee and the Indonesian rupiah, will affect Bangladesh’s competitiveness in garments exports to the United States and the European Union and is likely to cause a rise in payments for cheap imports, caution experts. Bangladesh’s currency remained almost static in the last few months.
The Indian rupee depreciated by 10.04 per cent against the dollar in the current year, while the Indonesian rupiah fell by 7.89 per cent, according to Bloomberg. The Chinese yen depreciated by 4.85 per cent in the year.
However, the Bangladesh taka depreciated only by 1.26 per cent against the dollar in the current year and stood at 83.75 against the dollar, according to a report in a top Bangladesh newspaper.
Bangladesh’s imports from both China and India, the two largest sourcing countries for Bangladesh with around $19 billion in annual total payments, is likely to rise because of the devaluation of the countries’ currencies as the products of the countries would be cheaper.
Experts also feel the trend may put pressure on Bangladesh’s balance of payment.