Dhaka. The continuous fall in the value of Bangladesh’s currency poses a threat to the country’s financial stability. This thing has been said in a document of the Ministry of Finance itself. In this document related to the financial policy of the government for the years 2023-24 to 2025-26, many such aspects are mentioned, about which warnings have been given.
One of the growing financial problems in Bangladesh is related to electricity subsidies. The government statement warned that if the US dollar becomes more expensive by one taka, the government’s subsidy expenditure on electricity will increase by taka 474 crore. If the taka depreciates further by 10 per cent this fiscal, the government’s debt will increase by taka 3,800 crore.
Like other countries, Bangladesh has also taken most of its loans in dollars. That’s why with the dollar getting costlier, the debt burden on various countries has been increasing even without taking new loans. Now this problem is taking serious form in Bangladesh also. The depreciation of the taka against the dollar is expected to result in a steep rise in subsidy expenditure, loan repayments and the cost of executing projects.
The recent sharp fall in the value of the taka has made imports costlier for Bangladesh. Apart from this, he has to spend more amount on repaying the loan (principal and interest) taken earlier. Same is the condition of the ongoing development projects in the country.
It has been said in the government statement- ‘Currency devaluation can lead to a huge increase in government expenditure on government projects. Government projects have a heavy dependence on imports. Therefore, cost of projects may increase due to costlier dollar, which will put additional financial burden on the government.
It has been told in the statement that currency devaluation will affect both the revenue and expenditure of the government. Per capita income can also be affected by this. If the taka continues to depreciate, it will be difficult for the government to meet its target of increasing gross national income in the Eighth Five Year Plan.
In Bangladesh, a budget of 40,265 crore taka was kept for food, energy and electricity subsidy in 2022-23. But due to currency devaluation, the government actually had to spend Tk 50,926 crore on these items. Now in the next financial year, the Ministry of Finance has estimated that 66,762 crore rupees will be spent on these items. This is a huge burden for a country with a small economy like Bangladesh.
The country’s central bank- Bangladesh Bank has increased the selling price of dollars 16 times in the current financial year. He did the biggest ever devaluation of taka on June 1. In the last one year, the price of taka has declined by 22.61 percent compared to the dollar. A year ago, one dollar was 86.45 taka, which is now about 106 taka.