Wed Jul 27, 2022 09:00 PM Last update on: Thu Jul 28, 2022 01:50 AM
‘We can’t afford any further depletion of our forex reserves’
Ahsan H Mansur PHOTO: COURTESY
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Ahsan H Mansur PHOTO: COURTESY
Ahsan H Mansur, executive director of the Policy Research Institute, talks about Bangladesh’s current economic crisis and related solutions in an interview with Eresh Omar Jamal of The Daily Star.
There has been a sudden increase in the price of the dollar recently. In reaction to that, some experts have criticised the central bank’s policy of trying to artificially keep the taka’s price high against the dollar. Do you think that criticism is justified?
For all latest news, follow The Daily Star’s Google News channel. The central bank did two things. It intervened significantly in the exchange rate market by selling USD 8 billion in the last one year. This intervention didn’t work and resulted in a significant reserve loss. What the global experience tells us is that market intervention works to smoothen things out, but it cannot stop fundamentally driven market trends. The market trend in recent weeks showed that the taka would depreciate against the US dollar – that cannot be stopped. But if on a particular day there is a shortage of dollars and its price is rising, an intervention can be used to smoothen things…
