The
steep fall of the euro along with political crisis at home has dealt a
twofold setback to garment exporters, who are losing money both ways.
“It's a double whammy for us,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.
“On
one hand, we are losing business for the ongoing political impasse
inside the country and on the other hand, we are losing money due to
currency devaluation in our main market.” The eurozone is the largest
export destination for Bangladesh, with 60 percent, or more than $14
billion, of garment items being shipped to the region every year.
The
taka is getting stronger against the euro and the dollar, he said. The
euro has been sliding in recent times for the financial crisis in
Greece, a member of the EU.
For instance, in September last year,
each euro traded for Tk 110, but now it is trading at Tk 87, which is
almost a 21 percent decline in value.
With the recent devaluation
of the euro, the exporters are receiving less after currency conversion
for the goods they shipped a few months ago, said Mustafizur Rahman,
executive director of Centre for Policy Dialogue.
Bangladesh
needs to look whether the exchange rates of the currencies of some other
competing countries like Vietnam, Pakistan and Cambodia are also
falling equivalent to Bangladesh or not, he said.
If
the euro also falls against the currencies of the competing countries,
Bangladesh will remain competitive in the same market; if not,
Bangladesh will lose competitiveness, the CPD executive director added.
Meanwhile,
Islam said the garment sector has already been facing challenges for
the ongoing political crisis, which is now in its seventh week.
The
retailers are either cutting work orders or diverting them elsewhere
due to the crisis. The garment makers are facing troubles in
transportation of goods from the factories to the port and from the port
to the factories for the crisis.
