Taka should be depreciated to boost exports: economist

The central bank should go for a steady depreciation of the taka to help exporters maintain their competitiveness as Bangladesh's competitors have devalued their currencies to boost export earnings, a top economist said.  

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said the real effective exchange rate in Bangladesh has appreciated almost 25 percent in 2014-15 which is seriously undermining export competitiveness compared with competitor countries.

The former economist of the International Monetary Fund advocated for an engineered steady depreciation of the taka.

Mansur spoke at a discussion on "policy action for boosting investment, trade and exports in Bangladesh" at Lakeshore Hotel in Dhaka on Wednesday.

The Metropolitan Chamber of Commerce and Industry organised the programme, MCCI said in a statement yesterday. Mansur talked about how the climbing foreign exchange reserves may be used to stimulate growth. He also identified financial accounts as the major reason for the jump in reserves.

He called for gradual non-reversible liberalisation on capital account. He said there is a need to further rationalise the returns on national savings certificates.

MCCI President Syed Nasim Manzur said Bangladesh needs to break out of the "low-investment, low-growth trap".

Selim Raihan, a professor of economics at Dhaka University, called for a paradigm shift in the investment regime.

Mohammed Farashuddin, a former governor of Bangladesh Bank; Zaidi Sattar, chairman of PRI; Abul Kalam Azad, principal secretary to the Prime Minister's Office; Mahbub Ahmed, senior secretary of the finance ministry; Hedayetullah Al Mamoon, senior secretary of the commerce ministry; and Rubana Huq, managing director of Mohammadi Group, also spoke. 

Former MCCI presidents Syed Manzur Elahi, M Anis Ud Dowla and Laila Rahman Kabir were also present.