Readers’ Voice

Low and middle income people are in the worst crisis

The value of money is decreasing. Inflation rate is increasing. Low and middle income people are facing major financial crises in the existing situation. Expenditure cannot be met with foreign exchange earnings.

Especially in the case of earlier deferred foreign debt and interest payments, dollars are now being paid from reserves. The reserve is decreasing. On the other hand, a portion of remittance and export earnings used to be added to the reserve earlier. At present, the banks do not have any extra dollars to settle their foreign currency liabilities.

As a result, dollars are not added to the reserves. Due to this situation for a long time, the pressure on reserves is gradually increasing. The price of the dollar is increasing. Under normal conditions, the import expenditure could not be met with the export earnings.

As a result, there was a deficit in foreign trade. Now the deficit has increased. Currently, the average monthly income from remittances and exports in the country is 656 million dollars. In contrast, an average of 5.5 billion dollars is spent on imports per month.

Apart from this, more money has to be paid for foreign travel, medical expenses, student education expenses, profits earned by foreign companies and royalties. The deficit is increasing. In total, the current account deficit of foreign currency in the last financial year was 333 crore 40 million dollars. In the previous fiscal year 2021-22, there was a deficit of 1,864 million dollars.

According to the report of the central bank, the central bank has sold 1 thousand 358 million dollars from the reserve in the last financial year to pay the import expenses and foreign debt. In July, it sold 1.14 billion dollars. Dollar selling continues in August. At that time, it only increased reserves by buying some dollars in July to pay the debt of the Asian Clearing Union.

Earlier the central bank used to increase the reserves by buying dollars from the market. This is because at that time the income was more than the foreign exchange expenditure. As a result, the banks were forced to sell the extra dollars as they could not keep more than the fixed quota of dollars. All these signify the economy is very unwell.

A B Siddique
Dhaka, Bangladesh