2017 USD to BDT Rate in Bangladesh: A Comprehensive Analysis

Introduction

The exchange rate between the United States dollar (USD) and the Bangladeshi taka (BDT) is a crucial economic indicator that has significant implications for businesses, individuals, and the economy as a whole. In 2017, the USD witnessed considerable fluctuations against the BDT, creating both opportunities and challenges for Bangladeshi stakeholders. This article delves into the factors that influenced the 2017 USD to BDT rate, its impact on different sectors, and forecasts for the future.

Historical Perspective

The USD to BDT exchange rate has been subject to continual variations over the years. In 2017, it opened at a rate of approximately 79 BDT per USD and closed around 83 BDT per USD. This represents a depreciation of the BDT by about 5.06% against the USD. As a consequence, Bangladeshi businesses experienced increased import costs and consumers faced higher prices for imported goods.

Factors Impacting the 2017 USD to BDT Rate

Several factors contributed to the 2017 USD to BDT rate.

• Global Economic Conditions: The global economic slowdown in 2017 led to a decrease in demand for Bangladeshi exports, weakening the BDT.
• US Monetary Policy: The Federal Reserve's decision to raise interest rates strengthened the USD against global currencies, including the BDT.
• Remittance Flows: Declining remittance inflows from Bangladeshi expatriates reduced foreign exchange earnings, leading to a depreciation of the BDT.
• Demand for Foreign Exchange: Increased demand for foreign exchange by importers to purchase essential goods also contributed to the weakening of the BDT.

Sectoral Impact

The 2017 USD to BDT rate fluctuations had significant implications for different sectors of the Bangladeshi economy.

• Import-Dependent Industries: The depreciation of the BDT increased the costs of imported raw materials and machinery, impacting industries such as manufacturing, pharmaceuticals, and textiles.
• Export-Oriented Industries: Export-oriented industries in Bangladesh benefited from the depreciation of the BDT, as they received higher earnings in local currency for their exports.
• Consumers: Consumers faced higher prices for imported goods due to the increased cost of foreign exchange.
• Banks and Foreign Exchange Dealers: Banks and foreign exchange dealers realized higher profits from currency conversion and trading.

Forecast and Prospects

According to the Asian Development Bank (ADB), the USD to BDT rate is forecasted to remain relatively stable in the medium term. However, the rate is subject to the following factors:

• Global Economic Outlook: The strength of the global economy will influence demand for Bangladeshi exports and foreign direct investment.
• US Interest Rate Policy: The future trajectory of US interest rates will impact the strength of the USD and its implications for the BDT.
• Remittance Inflows: Stable or increasing remittance inflows will support the BDT.
• Government Policy: The government's foreign exchange management policies and efforts to promote exports will influence the exchange rate.

Addressing the Pain Points

Businesses and individuals affected by the changing USD to BDT rate can explore various strategies to mitigate its impact.

• Hedging Instruments: Exporters and importers can use hedging instruments such as forward contracts and currency options to manage currency risks.
• Supplier Diversification: Businesses can diversify their supplier base to reduce reliance on countries whose currencies are strengthening against the BDT.
• Currency Monitoring: Regular monitoring of currency exchange rates and economic indicators can allow stakeholders to anticipate rate movements and adjust their strategies accordingly.

Conclusions

The 2017 USD to BDT rate was influenced by a multitude of factors, affecting various sectors of the Bangladeshi economy. Understanding the drivers and implications of the exchange rate is crucial for businesses, investors, and individuals. By adopting appropriate strategies, stakeholders can address the challenges and seize the opportunities presented by currency fluctuations. The Bangladeshi government has a pivotal role to play in maintaining a stable macroeconomic environment that supports economic growth and prosperity.

Tables

Table 1: 2017 USD to BDT Exchange Rate by Quarter

Table 2: Percentage Change in USD to BDT Rate by Sector

Table 3: Factors Impacting the 2017 USD to BDT Rate

Table 4: Strategies to Address USD to BDT Exchange Rate Fluctuations