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Taka’s journey to its golden jubilee
Alongside 50 years of independence of the country, ‘Taka’ marks its Golden Jubilee this year. Bangladesh’s first 1 Taka note portraying the map of independent Bangladesh went into circulation on March 4, 1972. 5 taka notes and 100 taka notes also went into circulation followed by 10 taka notes a few months later. Even after the post-war extreme economic crisis- the poverty-stricken war-torn country introduced its first paper money after just 2 months and 19 days of independence. Beginning the country’s journey with extreme famine and raging poverty, Bangladesh is now one of the fastest-growing economies of the world as stated by the World Bank with its booming garments and agriculture sectors.
https://thefinancialexpress.com.bd/economy/taka-marks-golden-jubilee-of-its-inception-1646388867
Russian invasion heating domestic prices
The far-reaching consequences of an ongoing oil price hike in response to Russia's invasion of Ukraine have already hit Bangladesh- with the state-owned BPC losing crores of money every day. Oil prices rise with the demand for fuel outweighing its supply as the world economies recover from the pandemic. Russia- one of the world's prominent oil suppliers, is embroiled in a conflict with Ukraine, increasing the high risk of supply disruptions. International markets are seeing an increase in the price of all forms of fuel and the price of other imported goods. The failure to adequately manage the issue is because of rising inflation. Alongside this, deterioration in the economy and volatility in the foreign currency market makes it critical to strengthen the microeconomic policies.
Bangladesh feels the heat of Ukraine invasion | The Daily Star
BEZA’s attempt at securing investment at economic zones
Bangladesh Economic Zones Authority (BEZA) intends to initiate a business continuity plan in its economic zones. The Programming Division of Bangladesh Planning Commission supports BEZA through the assistance of the National Resilience Program (NRP) and is also supported by the UNDP and funded by FCDO of the UK and Sida of the Government of Sweden. The primary objective of the Business Continuity Plan is to protect investments in economic zones from disaster-related losses and develop a mechanism that would promote continuity and resilience in the involved businesses. This would encourage more entrepreneurs to come forward and start big which would increase employment in the country due to reduced risk of loss and higher economic security.
12 pc drop in Remittance this February
12 pc drop in Remittance this February
Bangladesh reported a roughly 12% reduction in remittance inflows in February, despite measures that increased cash bonuses for remittances from 2% to 2.5 percent. It is suggested that this occurred owing to the short month of February having fewer working days available. However, in the wake of pandemic restrictions easing, money transfers through informal channels such as ‘hundi’ may have resumed. Circumventing banks may be encouraged now among expatriates due to the higher exchange rates offered in the illegal channels after the Bangladesh taka weakened against the US dollar, with 1 USD selling for around Tk 86.
Remittance drops 12pc in February (thefinancialexpress.com.bd)
The rouble’s collapse add up Russia’s isolation
The Russian rouble collapsed as harsh Western sanctions caused the US dollar to rise by as much as 40% against the rouble. The plunging currency can adversely affect the cost of imports, making it difficult to service external debts denominated in US dollars and impacting the livelihood of the Russian middle class. Furthermore, an increase in oil prices is unlikely to be welcomed by Russia since any money from commodity sales is predicted to pale in comparison to the harm caused by sanctions. Consequently, the rising oil prices and food staples exported from Ukraine and Russia will exacerbate inflation; the financial damage to Russian businesses and livelihoods could be lasting.
https://www.economist.com/finance-and-economics/2022/02/28/the-roubles-collapse-compounds-russias-isolation
European stocks rising from coordinated sanctions on Russia
European stocks rising from coordinated sanctions on Russia
As investors welcome coordinated sanctions on Russia, European stocks rose. The sanctions had targeted Russian banks but have left global payments through those banks and the energy sector unhindered. The MSCI World Index is 2.5 percent lower after the beginning of Russian investment and Walla street had set lower after a modest jump in European shares. Euro STOXX had gained 1.78 percent higher while the FTSE 100 climbed by 2.1 percent. It was described that the markets reflected upon geopolitical risks and faded those risks quickly. The decision to not lock Russia out of SWIFT interbank payments reflected the low risk of disruption that would have been caused to the markets involved in those transactions.
Interest rates hike alongside Sri Lanka’s foreign exchange crisis
The South Asian country, Sri Lanka is currently facing a huge foreign debt, which has adversely impacted its economic prospects. Due to the foreign exchange crisis, the country is now suffering from acute shortages of fuel, medicines, food as well as industrial raw materials, thereby contributing to the country’s surging inflation rate. To prevent the economic collapse, the central bank accelerated the interest rate, taxes have been raised on commodities and “non-essential” imports have been banned- to substantiate government revenue and ease the pressure on the external sector of the economy. In short, Sri Lanka's external reserves need to increase exponentially so that it can pay its foreign debt and bring economic stability.
Two birds with one stone: money and the environment
To let electricity reach the people and to be carbon-free- the Indian government started the Ujala LED bulb scheme. The free distribution of 37 crores of LED bulbs has saved 48,000 million kilowatt-hours. This resulted in saving Rs 20,000 crore for middle-class and low-income households. The LED street lights are saving Rs 6 crore annually dropping carbon emissions by 4 crore tons. The saved money would be used for investment or consumption resulting in the economic development of the country. Besides, the saved energy could be transferred to the industrial sector which would increase labor hours and productivity. Furthermore, the environment is benefiting as the traditional fuel-based energy system is being replaced by hitting two birds with one stone with the use of these policies.
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