Hits Rs 68.80 against dollar, Rs 1 equals Tk 1.12
The rupee on Wednesday closed further to the Bangladesh currency taka as the Indian currency plunged to a fresh low of Rs 68.80 against the US dollar.
The rupee, which lost 3 per cent against the dollar on Tuesday plunged by another 3.86 per cent on Wednesday to close at Rs 68.80 to the US unit, its biggest one-day fall in nearly two decades, reports Agence France-Presse.
Worries about a US-led military strike against Syria and surging crude oil prices fanned fears of a financial crisis in India.
Although the Bangladeshi taka was not traded officially in banks on Wednesday as it was a holiday on the occasion of Janmashtami, it had remained stable at around Tk 77–Tk 78 against a dollar for the last few months.
Different online currency conversion web sites including the Yahoo Currency Converter showed the value of the Indian currency at Tk 1.12 to Tk 1.13 to Rs 1 on Wednesday.
The value of Indian currency went as high as Tk 1.7 to Rs 1 in 2012.
The rupee, Asia’s worst-performing currency this year, has lost around a fifth of its value against the dollar since the start of 2013.
The Indian currency was around Rs 50 against a dollar early 2012 whereas the value of the taka against the dollar was around 83.
But the Bangladeshi currency appreciated to around Tk 78 a dollar in recent months against the rupee’s weakening.
Economists and exporters last week told New Age that continuous fall of rupee against the US dollar had started to have a negative impact on Bangladesh exports to India and other countries as the country’s exporters were losing competitiveness against the neighbouring country’s exporters.
Leading think-tank Centre for Policy Dialogue executive director Mustafizur Rahman said that India would get competitiveness on the markets where Bangladesh was also a player because of the weakening rupee against the dollar and the strong taka against the greenback.
‘We have common markets such as readymade garments, jute, shrimp and leather. Indian exporters would get advantage in these sectors,’ he said.
He said that Bangladesh exports to the Indian market would also be affected because of higher import costs for Indian importers.
Mustafiz said Bangladesh’s import from India might rise as India’s exporters would also get advantage against their competitors.
Former president of Bangladesh Garment Manufacturers and Exporters Association Abdus Salam Murshedy told New Age on Tuesday that the volatility of the Indian currency was alarming for Bangladesh garment exporters. ‘Our exporters are losing competitiveness because of the sliding Indian currency,’ he said.
‘We need alternative mechanism to protect our export-oriented industries as our currency is losing its value. The government should provide special dollar rate for exporters,’ Murshedy said.
India’s finance ministry, however, called the sharp fall of rupee irrational.
‘This is an irrational sentiment. It (the rupee) will correct itself. It is important to stay on the course. There is no need to panic,’ economic affairs secretary Arvind Mayaram told reporters in New Delhi.
Analysts fear the sharp rise in global crude oil prices will worsen energy-import dependent India’s already record current account deficit — the broadest measure of trade.
Investors have voiced worries that India could be heading for its worst balance of payments crisis since it pawned its gold in 1991 to cover its import bill.
-With New Age input
