Contemporary effects that may have impact on Forex ( Bangladeshi Currency)

1. “FIN 480”
Kazi Fahim Hasan - 1510094
Tanjia Afsana – 1410119
Sanjid Ibn Hasan – 1530250
Sumiya Akther- 1330924
Budrunnasa Antara-1520498
Contemporary effects that may have impact on Forex

2. Background of Bangladeshi curriencies
▸In 1971,Indian rupee was used in bangladesh.
▸The first treasury note in 1972.
▸In 1973 coins were implemented.
▸Treasury taka notes were issued from the year
1972 until 1989.
▸in 2008, the government issued ৳1,000 notes.
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3. Bangladesh Economic Condition and Exchange rate
▸Bangladesh is the 31st largest by purchasing
power parity and 42nd largest in the world in
nominal terms.
▸19% Bangladesh’s economy consists of
agriculture, 27% is industry-based, and 52% is
service-based.
▸Bangladesh had two different exchange rate
regimes- a fixed exchange rate system from
January 1972-May 2003 and a floating exchange
rate regime since June 2003.
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4. Factor influences currency exchange rates
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Y = α + βo + β 1X1+ β 2X2+ β 3X3+ β 4X4+ β 5X5
Y= Dependent Variable (Spot rate)
βo = Constant
β = Co-efficient
X = Independent variable
X 1= Inflation
X2 = Interest rate
X 3 = Income level
X 4 = Government controls
X 5 = Expected future exchange rates

5. BDT DEPRECIATION SET TO FUEL EXTERNAL DEBT STOCKS
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 Total external debt is the
sum of public, publicly
guaranteed, and private
nonguaranteed long-term
debt, use of IMF credit, and
short-term debt.
 Bangladesh Taka (BDT)
depreciated 4.0 per cent in
fiscal year 2017-18,
according to the latest
Monetary Policy Statement
(MPS) of the Bangladesh
Bank.

6. Effect of Trade Deficit on Currency Exchange Rate
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During a trade deficit, the BDT
generally weakens. Of course,
there are numerous inputs that
determine currency movements
in addition to balance of
payments, including economic
growth, interest rates, inflation,
and government policies. A
trade deficit is a negative
headwind for the BDT, but it
can still appreciate due to other
factors.

7. Currency depreciation Effect on Remittance Inflow
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 local currency depreciated by
more than Tk 4.0 against the
dollar in the last one year. Such
depreciation of the Bangladesh
Taka (BDT) against the dollar
contributed to the upturn in the
inward remittances in last half of
2017.
 The expatriate Bangladeshi
workers have sent home around
$15 billion in just-concluded
2017-18 m, year, which is 17
percent more than the
remittance sent in the previous
financial year.

8. Higher interest rate in recent days caused a decrease in local
currency
According to a report by central bank the local
currency interest has increased. It says-
 Some banks are charging more than 15%
interest rates on industrial loans
 57 commercial banks in the country are
charging double digit interest rates on loans
from businesses.
 the local currency depreciated and foreign
currency appreciated.

9. RMG export in japan caused a positive change in economy.
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The (RMG) export in japan has
emerged as the biggest earner of foreign
currency during this January-August. A
reliable source revealed-
 During January-August 128.2 per
cent growth of Bangladeshi
products was the highest among
all the exporting nations.
 Increasing at the rate of 27% per
year over the last several years

10. TRUMP'S POLICIES WILL DISPLACE THE DOLLAR
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 Perhaps ironically, the Russian
rouble has gained the most of any
major currency against the dollar
since the election. Turkey’s lira
has been by far the weakest.
 Greater attention was turned to
Mexico, which is uniquely
exposed to the US economy and
stood to be harmed by Mr.
Trump’s policies on migration
trade.

11. Conclusion
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we tried to find out local or global factors that may effect local currency (BDT). For that we
analyzed last 5 years news articles. According to the analysis we found strong relationship
between the dependent and independent variables.
And the news articles we followed shows the appriciation and depriciation of the local
currency due to inflation , Export-Import . Interest rate, Trade deficit , etc.

12. THANK YOU!