The factors affecting behind the currency depreciation of Bangladeshi taka recently are mentioned below:
1. High Inflation: The main cause of high inflation in Bangladesh is oil and
food
price hike in abroad. The high level of
inflation in the economy leads to lower the value of
local currency taka.
2. Low
Foreign Direct Investment:
The growth rate
of foreign
direct investment
is showing a declining trend. In the recent past, the FDI growth rate is severely low.
3. Trade Deficit: For the inception of
floating exchange rate regime, the export volume has increasing trends; as the huge amount of trade deficit with an
increasing trend.
4. Pressure on international reserves: Growth in exports thus far has not
matched rising import bills and slow remittance. Hence there has been a continuous pressure on the international reserves of the country.
5. Demand-Supply
mismatch: It has been created in the foreign exchange
market, leading the continuous depreciation that has been observing for the last year or so.