Dollar crisis in Bangladesh Impact of dollar crisis on Bangladesh economy

Dear friends, Neoteric IT brings you this article on the dollar crisis in Bangladesh and its impact on the economy of Bangladesh. Those of you who regularly read Neoteric IT articles may have seen this on our website but most of the visitors came to our website by typing and searching Bangladesh dollar crisis from Google. For them, in today's episode, we will discuss in detail how the reserve of Bangladesh has decreased. 

Dollar crisis in Bangladesh and its impact on the economy of Bangladesh - Dollar crisis in Bangladesh - How terrible is the dollar crisis in Bangladesh? 

According to the data of Bangladesh Bank, about 20 banks of the country do not have any dollar to meet their debt obligations. The banks have fallen into deficit while paying the liability of importing various goods. As the bank does not have the necessary dollars, the customers are trying to pay the debt by breaking the dollars. Where Bangladesh Bank says dollar crisis has been created. The foreign minister said there is no dollar crisis in the country. In fact, due to the dollar crisis, businessmen are unable to go to banks to open credit cards, as a result of which problems have arisen in the import of various types of products. What is a letter of credit in foreign trade and why there is a problem in opening a letter of credit for importing goods due to the dollar crisis, will be discussed in this episode of Kikenki.

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How terrible is the dollar crisis in Bangladesh?

According to the data of Bangladesh Bank, almost all banks of the country do not have any dollar to meet the debt obligations. The banks have fallen into deficit while paying the liability of importing various products. As the bank does not have the necessary dollars, the customers are trying to pay the debt by breaking the dollars. While Bangladesh Bank says that there is a dollar crisis, the foreign minister says that there is no dollar crisis in the country. In fact, due to the crisis, the businessmen are failing to go to the bank and open the loan. As a result, problems have arisen in the import of various types of products. What is a letter of credit in the case of foreign trade and why there is a problem in opening a letter of credit for importing goods due to the dollar crisis will be discussed.  

LC or letter of credit (LC) is almost closed

A letter of credit is called a letter of credit(LC). Which is abbreviated as LC. Physical Trade LC or Letter of Credit is a very useful subject. Because a foreign exporter will not want to send goods from abroad without knowing about the Bangladeshi importer or having an idea about his financial compatibility before paying the price. Similarly, no Bangladeshi importer will trust a foreign exporter and pay the full price before receiving the product. In this situation, the letter of credit plays an effective role. LC letter of credit is a specific undertaking or guarantee from a bank on behalf of an importer. The letter of credit states that if the goods reach the importer properly within the stipulated time, the importer's bank will send the amount due to the exporter's bank account. LC is the most popular method of international trade payment. LC is the most worldwide Also considered as a secure universally accepted payment method. The amount of dollars Bangladesh is earning from remittances and exports is much more than the country's import expenses and foreign debt repayments to customers. That is why opening of LC for daily necessities including food is almost closed at present. The few banks that still have dollars are dwindling. And due to this crisis, the inter-bank foreign exchange market has become almost ineffective. In this situation, the image of the banking sector of Bangladesh is being undermined by the foreign banks that have guaranteed LC. They are not sure about the price payment after importing Bangladeshi products. So many foreign banks have now started reducing their credit lines for Bangladesh. The head of the bank said on condition of anonymity that the current dollar crisis situation is very dire but the policy makers understand the gravity of the situation. no 

The amount of dollar deficit in the bank is increasing

The amount of dollar deficit of the banks is increasing and the rate at which the export income and remittance flow is decreasing, it is feared that the dollar crisis will intensify. Banks' LCs can be closed by taking Bangladesh LCs from foreign banks as they fail to pay their debts. Alternative currency transactions have been tried to solve the crisis, but there is no response. Recently, although the opportunity to open Chinese currency LC was given, there was not much interest from banks and customers. For this reason, the country is being forced to import. In recent times the LC opening rate has decreased but the council rate has increased a lot. Because no product is imported as soon as the LC is opened. Most debts are paid after arrival in a country. All the goods that were imported a few months ago have to be paid for now. Currently cars, TVs, In many cases, the central bank does not allow the import of products like refrigerators and fruits. Because such products move to other countries within a short time of opening the LC. So they have to be paid very soon. Agrani Bank has created the worst situation of Bangladesh dollar crisis. The state-owned bank does not have enough money to meet the LC, with a base of $256 million created. As customers, these deficits are being met by breaking the Dhaka dollar. That means the banks in danger have started spending the common people's dollars. If the customer wants to return the dollar, the bank will not be able to take it. Due to the same situation, Sonali Rupali and Janata Bank are delaying payment of many LC liabilities. Along with the state-owned banks, private sector banks are also in the list of failures. Many private banks have started breaking customer dollars to cover the deficit. come So they have to be paid very soon. Agrani Bank has created the worst situation of Bangladesh dollar crisis. The state-owned bank does not have enough money to meet the LC, with a base of $256 million created. As customers, these deficits are being met by breaking the Dhaka dollar. That means the banks in danger have started spending the common people's dollars. If the customer wants to return the dollar, the bank will not be able to take it. Due to the same situation, Sonali Rupali and Janata Bank are delaying payment of many LC liabilities. Along with the state-owned banks, private sector banks are also in the list of failures. Many private banks have started breaking customer dollars to cover the deficit. come So they have to be paid very soon. Agrani Bank has created the worst situation of Bangladesh dollar crisis. The state-owned bank does not have enough money to meet the LC, with a base of $256 million created. As customers, these deficits are being met by breaking the Dhaka dollar. That means the banks in danger have started spending the common people's dollars. If the customer wants to return the dollar, the bank will not be able to take it. Due to the same situation, Sonali Rupali and Janata Bank are delaying payment of many LC liabilities. Along with the state-owned banks, private sector banks are also in the list of failures. Many private banks have started breaking customer dollars to cover the deficit. 256 million dollars made on the base. As customers, these deficits are being met by breaking the Dhaka dollar. That means the banks in danger have started spending the common people's dollars. If the customer wants to return the dollar, the bank will not be able to take it. Due to the same situation, Sonali Rupali and Janata Bank are delaying payment of many LC liabilities. Along with the state-owned banks, private sector banks are also in the list of failures. Many private banks have started breaking customer dollars to cover the deficit. 256 million dollars made on the base. As customers, these deficits are being met by breaking the Dhaka dollar. That means the banks in danger have started spending the common people's dollars. If the customer wants to return the dollar, the bank will not be able to take it. Due to the same situation, Sonali Rupali and Janata Bank are delaying payment of many LC liabilities. Along with the state-owned banks, private sector banks are also in the list of failures. Many private banks have started breaking customer dollars to cover the deficit. in the list Many private banks have started breaking customer dollars to cover the deficit. in the list Many private banks have started breaking customer dollars to cover the deficit.

Dollar crisis in Bangladesh 

Islami Bank failed to pay its debts

Islami Bank BangladeshLtd., the country's largest bank could not pay the LC liability on time. About 30 percent of the country's total remittance flow comes through Islami Bank. Again, in terms of export income, the position of the bank is at the top. Still, the country's largest bank is in danger of paying its import liabilities. Islami Bank says that no bank in the country is getting dollars as per demand. Because of this, there is more or less crisis in all banks. Due to the dollar crisis, the commercial banks of the country are not able to open loans according to the needs of businessmen. Not only that, many established banks are struggling to pay their debts in the past. Even many banks have deficits of millions of dollars. As a result, many people are unable to import raw materials from outside. Due to which the local industry is severely affected. Earlier the money had to be paid after the arrival of the product, now the money is paid two to three months before the arrival of the product have to pay As a result, the big traders can open one or two LCs and the business of medium and small importers is about to close. According to the policy of Bangladesh Bank, the banks of the country can save 15% of their capital in foreign currency. But many banks have a shortfall of millions of dollars, far from the reserve limit. Experts say that if the dollar base of a bank exceeds the allowed limit, that bank is bound to default. As such, many banks in Bangladesh are at risk. Association of Bank Chief Executives ABB and Association of Foreign Exchange Banks Bafeda held a meeting with Bangladesh Bank and claimed that many banks of the country will not be able to pay the LC liabilities if the central bank does not provide dollar support. Even if the dollar is not given from the reserve, at least they want the opportunity to get all the dollars from the central bank. But these are Bangladesh Bank 

Bangladesh Bank has taken initiatives to make dollar market memorable

It has been informed by the central bank that Bangladesh Bank has already taken various initiatives to make the dollar market memorable. Currently, Bangladesh Bank has reduced LC opening by about 40 percent. A central bank team is monitoring bank openings as these LCs remain a major opportunity for money laundering abroad through house letters. Many traders show their imported goods at much higher prices than the actual value of the LCs. This extra money is easily smuggled abroad without the eyes of the government. In this way, many unscrupulous people are living a luxurious life abroad with expensive houses and cars by smuggling the country's money abroad. Dubai, Singapore, Malaysia, England, America, In Australia and Canada, the corrupt people of Bangladesh have built a mountain of illegal wealth by laundering the country's money. Money laundering is actually the name of Begum Para in Canada. Usually, many of the corrupt people who launder money are in the country, but their wives and children live in Canada. Begum Para is the name of the area where dishonest people live without Begum. If you want to know about Canada Begum Para and how the Begum Paras were developed.  

Thanks for read the post. You can also read the article in bangla - dollar-crisis-in-bangladesh