State of the Bangladesh Economy in FY2023-24 (First Reading)
Independent Review of
RBD
Bangladesh's Development
Going forward: Required policy initiatives
☐ Streamline discrepancies in the data concerning external sector-related correlates, particularly
with respect to export earnings. Investigate the underlying reasons behind the increasing gap.
Take appropriate remedial measures. Make the external sector data more transparent.
☐ The prevailing multiple exchange rates are not only creating confusion among market players, but
also proving to be difficult to implement. Incentivisation of the remittance flows through markups
is creating an increasing fiscal burden for the government, as also resulting in additional costs to
the banks.
The move towards a market-aligned exchange rate of BDT should be expedited, even if within a
band. This will incentivise forex flows and also help bring down demand for foreign exchange via
market signals rather than by way of administrative measures. Monetary policy will need to be
well-coordinated with the fiscal policy towards sound exchange rate management.
☐ Apparel exports are becoming increasingly volume-driven. In this backdrop, the need for moving
upmarket has emerged as a necessity. Incentives need to be recalibrated to encourage intra-RMG
diversification and also to encourage the move towards the growing market for non cotton-based
exports.
CPD (2023): State of the Bangladesh Economy in FY2023-24 (First Reading)
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