Taka's continuing appreciation

The local currency has been gaining against the dollar over the last eight months, going by Bangladesh Bank data. The greenback is currently fetching Tk. 79 per dollar, down from Tk. 81 in June last year. This is, however, reflective of the official rates, in the open market buying and selling rates are different, for all one knows.
The reasons for appreciation in Taka value vis-a-vis dollar are put down to substantial inflow of remittances, declining imports and the upward trend of exports. Bangladesh Bank must be closely monitoring the appreciation-inducing factors and their contributions, both individually and collectively to the prevailing exchange value between taka and dollar.
When Taka value depreciates, imports cost more whilst the exports enjoy the benefit of depreciation in terms of competitiveness in the overseas market. In fact, as Mustafizur Rahman, executive director, CPD observed, "The exporters had enjoyed the benefit of depreciation of Taka over last one and a half years..." Taka depreciation during period was by nearly 20 percent. Continuing depreciation in the value of Taka is not good for the economy because harder the currency as against dollar the greater the strength of local legal tender.
Understandably, the appreciating trend is causing the exporters to worry over lack of competitiveness in the world market. The exports are seemingly on an upward curve indicating a positive trend. But of course, the volume of exports may not necessarily imply better earnings in foreign exchange from the overseas market. Increase in Taka value unless held at a reasonable level, could have a knock-on the economy. For decline in imports will have a negative impact on investment which in turn would undercut employment.
As long as taka-dollar exchange rate remains around Tk. 79-80 (plus-minus), it needn't set off any alarm bell to the exporters. But anything above that rate could hurt importers and anything below par is likely to affect the exporters.
In all, 'the central bank will have to handle the situation carefully' so that a balance is struck between appreciation and depreciation in the value of Taka.