Export income has fallen with a reduction in the opening of Letters of Credit (LCs). Due to stagnation in foreign trade, foreign reserve has also seen a slump.
Specialists say the problem will be solved soon since the price of Taka has been reduced against the Dollar, which will have a positive impact on export.
According to Bangladesh Bank, the export earning was nearly Tk3 billion last September, which was a Tk3.14 billion increase year on year (yoy) over Sept 2018.
Compared to last September, export income has dropped by 7.30 percent. As per Bangladesh Bank information, export income in the first three months of the current fiscal year 2019-20 has been over $9.64 billion; over the same period last year, this income was nearly $10 billion.
Researcher of Bangladesh Institute of Development Studies, Dr Zaed Bakht, says: “The import of food-grains has fallen for some time, so import expenditure is less now. The government does not have to import for big projects anymore. As for the negative impact on export, the reason is the price of Dollar.”
Taka has been devalued against the Dollar which will have a positive impact on exports and once exports increase, foreign currency reserves will also rise, he explains.
In July-August, rate of opening LC’s has fallen by 9.90 percent. In June, the slump in import trade’s growth was minus 8.83 percent.
In June 2018, imports cost over $4.25 billion and in June, 2019, it exceeded $3.88 billion.
As per the central bank, due to the stagnation in foreign trade, foreign reserve has also fallen by 3.37 percent in September this year compared to last year.
At August-end this year, the trade deficit was $1.97 billion. Meanwhile, remittances have risen this September over last year by 28.85 percent. In the first three months of the current fiscal year, remittances have gone up by 16.59 percent compared to last year.