Bangladesh, which is on the brink of unrest, is facing a severe economic crisis. According to data from the Bangladesh Bureau of Statistics, the Consumer Price Index (inflation) in July rose to an all-time high in 12 years at 11.66 percent. Food inflation in particular exceeded 14 percent in July for the first time in 13 years, reports the Daily Star.
The supply chain has been badly affected across Bangladesh due to the protests. Moreover, the business sector in the country is also facing a cash crunch as the central bank has imposed restrictions on the maximum limit of cash withdrawals as the situation has worsened after the lockdown was imposed due to uncertainty. Removal of the government led by Sheikh Hasina, and a new administration led by Nobel Peace Prize winner Muhammad Yunus – which is working to bring normality back to the country.
Bangladeshi citizens cannot withdraw more than 2 lakh Bangladeshi Taka at a time from any bank.
India Today visits Kawaran Bazar, We spoke to some local retailers at Dhaka’s largest wholesale market to learn about their situation. With the Bangladeshi Taka’s value steadily falling against the US dollar, retailers are under pressure to keep prices of essential commodities stable – which prevents them from making good profits.
However, retailers told India Today that the prices will go up soon.
The number of people in Kawran Bazar has reduced considerably due to unrest in the country. Although there has been peace in Dhaka for the last few days, protests continue in the interiors of Bangladesh.
Local retailer Shafiqur told India Today that prices of key commodities like rice and pulses have “increased marginally” as these are imported.
“We are not increasing prices despite disruption in the supply chain mechanism,” he said.
Echoing Shafiqur’s views, another retailer, Rafiq said that at the moment, traders are keeping prices stable but the government has assured them that they will be able to hike prices by next month as essential commodities are already getting costlier.
Bangladesh imports pulses, dry fruits, spices and other essential commodities from neighbouring countries, including India.
The prices of essential commodities and other goods are expected to rise even further due to supply chain disruptions.
Meanwhile, data from the central bank showed that Bangladesh’s foreign exchange reserves reached $20.48 billion on July 31, down from $21.78 billion last month. The drop of nearly $1.3 billion in Bangladesh’s currency reserves has forced the interim government led by Muhammad Yunus to take several major decisions, including setting a limit on the maximum cash withdrawal in a day.
Local trader Islam Mohammad told India Today that the maximum withdrawal limit was preventing them from buying more foreign currency, resulting in a slowdown in the overall trading volumes.
He said the inability of the business community to buy adequate foreign currency, which is needed for trade, would ultimately impact imports and fuel inflation in Bangladesh.
Bangladesh is in the grip of unrest which initially began as protests against the quota system in government jobs but soon turned into anti-government protests that have left at least 400 people dead. The unrest forced Sheikh Hasina to resign as the country’s prime minister and Muhammad Yunus – known as the ‘banker of the poor’ – to take over as the chief adviser of the interim government.
The protests have resulted in the exodus of minorities, especially Hindus, from Bangladesh. targeted by the mob, Reports of vandalism, looting and mob killings have flooded social media. Mohammad Yunus and several other political leaders in Bangladesh have repeatedly appealed for peace and stability, with the country’s new head of state urging students – who are at the centre of the protests – to protect minorities.
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