The continuous downslide of the Indian rupee vis-à-vis the US dollar and other currencies win recent weeks should be good news for Bangladesh.
From Rupees 54 to a US dollar even a month ago, the exchange rate is now hovering around Rupees 60 to an US dollar.
Experts predict this may fall further.
The Indian Finance Minister P Chidambaram says there is no cause for worry and the correction will start soon.
The positive in the tale is that this will make Indian exports more competitive.
But for the tens of thousand of Bangladeshis who visit India for medical treatment, education, business or just to meet friends and relatives, the changes in the exchange rate means they have more Indian rupees for every dollar exchanged on arrival.
The icing on the cake is that the Bangladesh Taka has appreciated sharply vis-à-vis the US dollar — from TK 84 to an US dollar a year back, the exchange rate hands between Tk 77-78 to an US dollar now.
So for the likes of Masuda Haque who is here for retina therapy, it means she got more dollars for the Takas she paid in Dhaka before embarking on the journey to India than eight months ago when she last came to Kolkata.
And she got more Indian rupees, much more, when she changed the dollars here on arrival.
“It is a two way gain and I am happy about it. This is possible because our Taka has become stronger and the Indian rupee weaker against the dollar,” said 45-year old Masuda.
Currency trading in Kolkata is buoyed by visiting Bangladeshis.
Dozens of foreign exchange dealers in central Kolkata’s business district from Park Circus to Sealdah are dotted with Bangladeshis arriving with wads of US dollars and taking away Indian rupees.
From patients like Masuda to students like Habib Tanvir, Bangladeshis in India for treatment, education or business are loving the way it is at the moment.
“Hope it stays this way,” says Dhaka trader Mohammed Shamsul. “I can order more for the same amount from India now.”
But while it may be great for Bangladeshis visiting India, it may not be such good news for the bilateral trade.
The two-way trade between India and Bangladesh in 2011-12 stood at $4.4 billion. While India exported goods worth $3.8 billion to Bangladesh, imports to India were only $0.6 billion.
Despite India granting duty free access to Bangladesh in September last year, Bangladesh’s exports to India remained low and confined to edible fruit and nuts, fish, apparel and textiles.
India exports cotton, cereals, nuclear reactors, boilers and machinery to Bangladesh.
Recently, India also slashed its sensitive list under the South Asian Free Trade Agreement (Safta) for less developed countries.
But the fall of the rupee will make Indian exports more competitive and Bangladesh may end up importing more from India for obvious reasons.
But the appreciation of the Taka will make exports from Bangladesh to India less competitive.
Specially if the Taka appreciates sharply vis-à-vis the Indian rupee.
In 1986, an Indian rupee fetched Tk 2.5. That came down to TK 1.14 to a rupee in 1999. Despite up and downs over the last decade, it has hovered around TK 1.2 to 1.3 for a rupee.
If the rupee falls further, Indian exports to Bangladesh will rise but not the other way round, Bangladesh diplomats in India apprehend.
Source: Bd news24
