The Problem of Foreign Exchange related price hike

Blood sugar test strips

Dear Sir,

The other day a salesman of a pharmacy at Mirpur 11, Dhaka 1216 demanded Taka 750/ for a pack of 25 strips that are used to test blood sugar at home. The same used to cost about Taka 400 three months before. Asked about the cause of this sharp price hike, the salesman said the import cost of this item has increased due to rise in the value of the dollar against the Bangladesh Taka.

Another salesman said the high price is also the result of market manipulation. As imports are delayed due to shortage of dollar and inability of the banks to open letters of credit for import of goods, traders spare no time to increase the price of the products that are still available from their stocks. Increase of price could have been justified if they had marketed items that have been imported at high costs. But what’s the logic behind raising prices of goods that were imported before the dollar started becoming scarce and costlier?

The problem is, the price hike of imported commodities is indiscriminate, and be those essential or nonessential items. And keeping pace with those the prices of locally produced items have also increased on the plea of rises in the prices of their imported raw materials. The thing does not end here. Even essential commodities produced without requiring raw materials to be imported have increased on the plea of higher transportation costs. Added to this burden is the fall in the value of the Taka in local transactions because, according to many, the printing of thousands of crores of Taka currency notes and their circulation in the market in the form of meeting government expenditure, according to newspaper and news media reports.

Government servants get annual increments to their salaries, those serving reputed private companies also get this benefit. Small private companies, instead of giving annual increments make payment of salaries and emoluments irregular putting their employees into extreme sufferings. The condition of micro traders roadside shop-keepers, retired government servants is worse and that of day labourers and unemployed people is beyond description.

May we urge the authorities concerned to make dollar available for import of essential items by cutting down expenses on mega projects for the time being, and refrain from printing and distribution of Taka currency notes unless they are backed by the creation of fresh wealth in the country?

Zafor Ahmed,

Tika Tuli

Dhaka - 1000