April 02, 2006


In economic terms "devaluation" is a reduction in the value of a currency. Why it is done is a complicated matter. A country may resort to devaluation to decrease import and to increase export (exporters can offer lower price and be more competitive) and thus increase foreign currency earnings.

There is a rumor that fresh devaluation of Taka will be made in Bangladesh soon. I guess as election is coming, the government is keen to make a show of a healthy foreign currency reserve. For a country that is depended on a lot of imports, it means price increase and decrease of purchasing power. More ironically, this means decrease of salary of government officials deputed abroad as their BDT salary is converted into USD and paid accordingly.

This move is non-benevolent to general people. So why nobody is bothering?


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