Finance minister AHM Mustafa Kamal said on Sunday depreciation of taka would not bring any benefit to an import-dependent country. “Some people ask why we are not devaluing currency to enhance export earnings. But the reality is if we even devalue currency to Tk 150 (against US dollar) from the present rate, export can’t exceed import,” the minister told an event in the capital. “So there is no reason why you would go for devaluing the currency,” he added. The minister made the remarks while speaking at a roundtable discussion organised jointly by the Daily Observer and the private television channel DBC. Explaining the reasons, the minister said that the country would not be able to slash imports such as consumer goods. The mid-level essential products are now produced in Bangladesh, for which import is not required. But the luxury items like BMW and Mercedes-Benz cars import would not go down no matter what their prices are, because people who buy such items have huge money in hand, he said. “After calculation, I’ve found currency devaluation won’t be helpful for Bangladesh,” noted the minister, a chartered accountant by training. Mr Kamal said instead of going for blanket devaluation, the government can go for providing sector- specific facilities. “We can provide incentives for new markets and new products.” He said Bangladesh has invested a lot in infrastructure development. “Now the time is to reap benefit like attracting foreign direct investment. If we devalue currency now, FDI (foreign direct investment) won’t come.” “If a country tends to depreciate its own currency, it doesn’t get FDI,” he said. The minister said Bangladesh’s economy faces challenges alongside having some brighter sides. “Globally, people praise our achievements and many of them follow us. We have already reached that point,” he said. While describing the challenges, he named the export sector, which is now witnessing a negative trend. “We are not an isolated country. Many other countries are experiencing this,” he insisted. He said Bangladesh will reap benefit from the fourth industrial revolution. “We are ready for industrialisation which will help generate employment.” Mr Kamal said there will be quality employment in future. Regarding low investment, he said there are many reasons behind it. “It doesn’t happen overnight, rather it increases over the years. Now it is time we eliminated these garbage and further systematised the economy, by bringing in discipline.” He said the non-performing loan (NPL) is very high because the interest rate of bank loan is even up to 30 per cent. He wondered who could repay the loan when the interest rate is so high. Mr Kamal said the interest rate is high, but there is no exit route for the borrowers. “No law is there to help them. There was an insolvency act, which was supposed to help them, but the law itself remained ineffective.” There is no asset management company where distressed assets can be handed over for managing, he added. “What we are doing is providing long-term loans against short-term deposits. The distortion or mismatch, whatever you say, begins from the very first day,” he noted. Regarding the slumping stock market, the minister said everyone knows about the problems and also the solutions. “You have to create a group to resolve the crisis in the stock market. The solution lies with stock market players, not with the government,” he argued. “What the government can do is to strengthen the economy, which in turn will help the stock market,” he noted. He said the country’s economy is on a strong footing, but the stock market is not doing well. “That can’t happen. The solutions have to be found on your own.” Former central bank governor Dr Salehuddin Ahmed, president of the Federation of Bangladesh Chambers of Commerce and Industry Sheikh Fazle Fahim, distinguished fellow of the Centre for Policy Dialogue Prof Mustafizur Rahman, director of Dhaka Stock Exchange Rakibur Rahman also spoke on the occasion.
