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© Reuters. Dollar shortage in Bangladesh hits businesses and students
Azad Majumder
Dhaka, Nov 18 (.).- The shortage of dollars in Bangladesh, caused by an increase in imports and a drop in sources of foreign currency, has hit businessmen and the growing number of foreign students in the Asian country, sources from the sector reported this Friday to EFE.
“We are going through a difficult time, as our current account situation has turned significantly negative,” Syed Mahbubur Rahman, managing director of the Bangladeshi private bank Mutual Trust Bank (MTB), told EFE.
INCREASE IN IMPORTS
The shortage of dollars in the Asian country is due, among other factors, to an increase in imports that makes it difficult for businesses to obtain letters of credit.
Between July and September of this year, banks issued 8.57% fewer of these payment orders compared to the same period in 2021.
“There has been a build-up in demand after the coronavirus. Our monthly imports have increased from about $6 billion to $9 billion lately. This has created a huge gap between revenue and payments,” Rahman said.
According to the central bank of Bangladesh, the foreign currency balance of private banks fell to about $4.5 billion last October from $5.2 billion available in June this year.
The increase in imports also hit the foreign exchange reserves of the Asian country, which fell to 35.810 million dollars last October compared to 46.460 million in the same period of the previous year.
FALL IN REMITTANCES AND EXPORTS
The drop in remittances and exports, the two main sources of foreign currency for the country, have further complicated the situation.
Bangladesh received $20 billion worth of remittances in the 2021-22 fiscal year, up from $24.77 billion a year earlier, according to official data, while the country’s export promotion office shows a year-on-year decline in exports of 7 .85% in October.
The situation has been described as an “emergency” by businessmen concerned about the shortage of foreign currency.
“We are facing an emergency situation. No system is working normally,” Mohammad Hatem, president of the Bangladesh Textile Manufacturers and Exporters Association, told EFE.
The source stated that production in many factories in this vital sector for the country’s economy has plummeted due to high energy bills and power cuts, which is why banks are reluctant to issue payment orders. is an added concern.
“Banks are taking a conservative approach…, we can’t import raw materials, which is making production difficult,” he said.
AFFECTED STUDENTS
Rahman, also a former president of the Bangladesh Bankers Association, explained that this drop in currencies has forced banks to limit the opening of accounts for students who seek to pursue their studies abroad and must pay their fees in foreign currency.
“It’s not that we have completely stopped opening these accounts … but we are selective and we are trying to serve only our current clients,” Rahman explained.
Almost 50,000 Bangladeshis traveled abroad in 2021 to study, according to Unesco data, a growing number: the US embassy in Dhaka revealed this week a 23% increase in the number of students who came to this country in a single year.
The economist Ahsan H. Mansur told EFE that the only way out of the situation is “reducing imports.”
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