• Prices of daily commodities will increase
• Overall inflation will increase
• Expenditure will also increase in the non-food sector
In one day, the price of the dollar increased by a record 7 rupees in the country. The dollar bank rate is now Tk 117, which is higher in the open market. Importers feel that the dollar will not match the price even if LC is opened for import. This will increase import costs. Inflation will rise further. Import dependent products have to be bought at higher prices. Overall cost burden is increasing again.
The country’s product importers termed the sudden increase in the price of the dollar breaking all previous records as ‘a blow to the neck’. They say that the dollar crisis has been ongoing in the country for a long time. Many traders could not buy dollars at the fixed price to open letters of credit for the commodities they had to import. Had to pay extra. Which has an impact on the current commodity market.
In this new instability in the market, the price of imported goods will increase again. Currently, the “crawling peg” (a method of adjusting the exchange rate of the domestic currency to the foreign currency) in fixing the exchange rate of the dollar has led to a large depreciation of the rupee. Now the dollar counts more than ever.
Now suddenly if the dollar price is too high, it will have a negative effect. Imports in particular will be negatively affected. Importers will be forced to increase the price of the product. Common people will be under pressure. Inflation will increase, people will suffer. Bangladesh Shop Owners Association President Helal Uddin
In this regard, Taslim Shahriar, Senior Assistant General Manager of Meghna Group of Industries told Jago News, “The increase in the price of the dollar will be a ‘blow on the back’ for us (importers). If we adjust it now, the price of the product will increase. The way the dollar is being priced, that price will not match the dollar. On the contrary, it may cost more than 7 rupees to open an LC to determine the price.’
He said, ‘Actually, we are in a dilemma. Don’t know what the situation will be. The official rate of last dollar was 110 rupees. Then I bought dollars at the rate of 120-122 taka to open LC. What will happen if it increases now?’
Taslim Shahriar said, ‘The government has set a price between the dollar and asked the banks to trade freely around this rate, if that is the case, it is possible to do business. But if it is not done properly, it will be very dangerous if the price increases further.’
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Abul Bashar Chowdhury, chairman of BSM Group, a consumer goods importing company, said, “In the import-dependent economy of Bangladesh, most of the machinery, starting from food, has to be imported. If the price of dollar increases, importers will be in the biggest danger. Due to insufficiency of dollar, most banks are reluctant to open LC, this trend will increase. Imports will decrease and the price of products will increase.
For several months now, the price of imported consumer goods has increased in the retail market due to the strong dollar. However, almost all of the year’s demand for food grains and spices is produced in the country. But beyond this a large portion of food grains and other commodities have to be imported to meet the full supply. That is why the dollar has the biggest influence on the price of goods in the country’s market.
In particular sugar, palm oil, soybean oil, milk and milk products, ginger, pepper, wheat, rice, lentils, onion, ginger, garlic, oilseeds are among the top food imports. Apart from this, the cost will also increase in the non-food sector including education, medical treatment, transportation, starting from soap and shampoo, which are daily necessities of the common people.
Helal Uddin, former vice-president of FBCCI and president of Bangladesh Shop Owners Association told Jago News, ‘Our country is dependent on imports. Our economy has been under pressure for a long time. Now suddenly if the dollar price is too high, it will have a negative effect. Imports in particular will be negatively affected. Import cost of goods will increase. Importers will be forced to increase the price of the product. Common people will be under pressure. Inflation will increase, people will suffer.’
Setting the dollar rate at Tk 117 is better if implemented through crawling pegs. But it is difficult. The price of the dollar should be controlled in the open market. If not, there is definitely a possibility of inflation. Dr. AB Mirza Azizul Islam
Advisor to the former caretaker government. AB Mirza Azizul Islam said, ‘Dollar rate of Tk 117 is better if implemented through crawling peg. But it is difficult. The price of the dollar should be controlled in the open market. Otherwise, inflation is likely to increase.’
High inflation is now one of the biggest challenges in the country’s economy. It was also acknowledged in a meeting of Bangladesh Bank’s Monetary Policy Committee (MPC) on Wednesday. In that meeting, two challenges of the economy were defined as continued high rate of inflation along with continuous depletion of foreign exchange reserves. As a result, this appreciation of the dollar is strengthening the challenge of inflation.
Stakeholders say inflation is like a tax that burdens everyone, rich and poor alike. If inflation is higher than income growth, the poor and middle class will suffer more. The price of goods in the market is already high. Along with it, the cost of clothing, education, medical and transport sectors also increased. All in all, people are struggling to cope with the pressure of inflation.
Halimul Reza, a shopper at Segunbagicha market, told Jago News, “I heard that the price of the dollar has increased.” I know the price of all products will increase now. At the beginning of the month there is some shopping left for the family. That’s why I came to the market in a hurry. The price of goods may increase tomorrow morning. Because only an excuse is needed to increase the price of products in the country. It doesn’t matter if there is a logical reason.
NH/ASA/GKS
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