Favourable dollar-taka exchange rate saves apparel exports

Bangladesh’s exported garment items in the first 11 months of 2017 amounted to  USD 26.40 billion, up 1.38 per cent year-on-year, according to data from the Export Promotion Bureau (EPB).

The favourable dollar-taka exchange rate has lent a helping hand to apparel exporters in the outgoing calendar year.

At the start of the year, the greenback traded between Tk 78 and Tk 79 and during the course of the year it crawled up. On December 20, it traded at Tk 83.20.

“The current exchange rate is favourable for exporters. We should handle the exchange rate softly,” said executive director of the Policy Research Institute of Bangladesh Ahsan H. Mansur.

He went on to suggest that the dollar can be allowed to appreciate to up to Tk85.

If it goes past the Tk 85-mark, it will be bad for the balance of payment and macroeconomic stability as imports would become costlier.

However, exporters want further devaluation of the local currency.

“The exchange rate has only started becoming export-friendly,” said Faruque Hassan, managing director of Giant Apparels, a leading garment exporter.

According to Pakistan-based DAWN newspaper, the local currency should be devalued further against the dollar to compensate for the rising cost of production such that exporters can continue to be competitive on the global stage.

At least 10 per cent devaluation of the currency is fine for the sector as garment exporters have faced low exchange rate over the last five years, he added.

“The exchange rate is still not up to the mark when compared with our competing countries like India and Turkey,” said managing director of Envoy Group Abdus Salam Murshedy.