The US dollar touched its highest level since 2002 on Thursday while the devaluation of taka continued to hit Bangladesh's trade heavily, sending costs of import, and production and shipment of exports through the roof, reports bdnews24.com.
Bangladesh Bank has taken a series of measures in an effort to reverse the record slide in the value of the taka against the US dollar, but the moves appeared to be floundering.
In a recent report seen by bdnews24.com and submitted to a parliamentary standing committee, the foreign ministry said trade deficit stood at $5.61 billion in the first half of 2021-22 fiscal year, which was $6.87 billion in the same period last financial year.
Besides the deficit, pressure on foreign currency exchange rate may further push taka's value against dollar down, the ministry said in the report on the war's impact on Bangladesh.
The parliamentary standing committee on the foreign ministry discussed the report on Wednesday. Its Chairman Muhammad Faruk Khan said they got the report.
"We're aware of the issues. They're basically economic issues, not diplomatic ones. People in the finance and commerce ministries are looking into the issues," he said.
Serajul Islam, spokesman for the central bank, recently said they have sold over $960 million on the open market so far this year to keep the flow normal.
The Bangladesh Bank also ordered the banks to keep the cash margin at a minimum 25 percent to open the Letter of Credit for imports of goods that are not considered urgently needed. "It'll discourage import of luxury goods and ease some pressure on the dollar."
Besides these, the government has offered expatriate Bangladeshis to invest unlimited amounts of money in the dollar bond. But the government needs to pay the interests in dollar, so it has lowered the interest rate to reduce the amount of dollars going out of the country.
But analyst Selim Raihan thinks the authorities should assess the situation regularly and take immediate steps keep it under control. "We will realise what to do if we do it after a fixed time."
The foreign ministry fears the sanctions imposed by the West on Russian entities may complicate Bangladesh's Rooppur Nuclear Power Plant Project and a plan to launch the country's second satellite, both backed by Russia.
The report said the funds under the credit deal with Russia are transferred through the Federal Reserve of the US.