Bangladesh Taka (BDT) and US Dollar (USD)
It has been more than 35 years since Bangladesh has a currency of their own, yet throughout these 35 years, it is noted that the Bangladeshi Taka (BDT) has been on a decline against major currencies around the world, including the US Dollar.
Currently, 1 US Dollar trades at about 68.88 Bangladeshi Taka, or 1 Bangladeshi Taka compared against 0.0145 USD. While this rate is still higher compared to its neighbour Pakistan, there is little indication if the Bangladeshi may appreciate against the US Dollar in the long term.
The value of the Bangladeshi Taka is often affected by the remittance of US Dollar by Bangladeshis working overseas. Many Bangladeshis work overseas as maids, construction workers and other similar low paying jobs, but earning salary still much higher than if they would had earned in Bangladesh. While there could be hardship, most Bangladeshi are able to endure the time away from home as they will usually head home once they have saved up enough after about 5-10 years, enough for them to setup their own businesses or if they are lucky enough, to retire. In the meantime, the money they remit back (in US Dollar or other currencies) means that there is a stable demand for the Bangladeshi Taka, preventing the value of the Bangladeshi from sliding.
One key trend that can potentially reverse the depreciation of the Bangladeshi Taka is to increase the remittance amount by their overseas citizens. This can be increased not by having more citizens working overseas, but by having citizens working overseas remitting more money home. This will require (more…)
