Bangladesh’s export earnings hit a record high of $52.08 billion in FY22. However, inflation and economic slowdown across the world impacted the country's export earnings. Though clothing is the main export product of Bangladesh, the export basket includes many other products that contribute significantly to the economy. Let’s take a look at Bangladesh’s top export products. 10 Major Exportable Products of Bangladesh Bringing Highest Earning  Besides the apparel industry, small factories of various export products have been developed in all corners of the country by private initiatives. Here are the product categories that bring the highest foreign exchanges for Bangladesh. 1. Readymade Garments In Fiscal Year (FY) 2021-2022, the export value of Bangladesh’s Ready-Made Garment (RMG) sector reached an estimated $31.46 billion or approximately Tk. 3,33,639 crore (the exchange rate is equivalent to Tk. 106.05), which was a growth compared to the previous year’s figure of $27.95 billion or approximately Tk. 2,96,415 crore  (the exchange rate is equivalent to Tk. 106.05). Read More: BGMEA, SOWTEX to help connect more Bangladeshi RMG exporters with Indian textile suppliers The RMG exports of Bangladesh comprise a wide range of knitwear and woven garments, including shirts, pants, T-shirts, jeans, jackets, and sweaters. Notably, the Export Promotion Bureau (EPB) statistics indicate that knitwear products saw a remarkable rise of 36.88% to $23.2 billion, or approximately Tk. 2,46,040 crore, outstripping woven garments, which increased by 33.82% to $19.4 billion or Tk. 2,05,741 crore approximately. This surge in the apparel industry has had a great impact on Bangladesh’s economic development. The major foreign markets for Bangladesh’s RMG exports in FY22 were the United States, the United Kingdom, Germany, Italy, France, Spain, the Netherlands, Canada, and Belgium. 2. Jute and Jute Products Bangladesh is one of the leading exporters of jute and jute products in the world. The country has a long history of jute cultivation and manufacture, dating back to the colonial era. Bangladesh’s jute industry is in the middle of a period of immense success. Read More: Export of jute products a boon for Satkhira women.

Bangladesh Bank in a directive on Thursday said that money changers trading in foreign currency can keep a maximum of Tk 50 lakh cash at hand. The Foreign Exchange Policy Department of Bangladesh Bank issued a circular in this regard and sent it to the top executives of banks for immediate effect. According to Foreign Exchange Transactions Guidelines, the maximum stock of cash of a money exchanger must not exceed $25,000 or equivalent at the close of each business day. If their cash dollar amount is more than this limit then at the end of the day the establishment should deposit it in the foreign currency account of the respective bank. The balance of that account must not exceed $50,000 or equivalent at any point in time. Read: Remittance: Bangladesh Bank tells banks to provide Tk 107 per dollar The central bank sealed seven unlicensed, illegal institutions on September 27 and 28 due to dollar manipulation in the country. Before that, 42 companies were served show cause notice due to various irregularities in dollar trading. The licenses of five more establishments have also been suspended. The latest circular aims to establish a stable foreign exchange market in the country.

Expatriate Bangladeshis will get maximum Tk 107.5 per US dollar instead of Tk 108, for remittance from October 1, 2022. Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) have set this rate for remittance next month – to stabilize the forex market. Economists are saying controlling the exchange rate would have negative impact on the current inward remittance flow. Read: Bangladesh received over $1 billion remittance in Sep 1-15 Economist and Chairman of PRI, Ahsan H Mansur, told UNB that this is not the right decision to attract more remittance when the kerb market rate is over Tk 114 per dollar. It may encourage sending money through illegal channels, which does not help in resolving the forex crisis, he said. Professor Mustafizur Rahman, distinguished fellow of CPD, also said that controlling exchange rate is not helpful when market demand for forex is expanding. Read:Uniform rate: Tk 108/dollar max for remittance, Tk 99/dollar for export income from tomorrow He said several rates for US dollar will create discrepancies and discourage remittance flow.  The illegal sector will be encouraged while exchange rate difference between banks and kerb market will be widened, Prof. Mustafizur said. According to the decision of the meeting held on Monday, remitters will get maximum Tk 107.5 per US dollar. Earlier on September 11, ABB and BAFEDA fixed the maximum price of a dollar at Tk 108 for remittance. Read Explainer: What it means to let taka float The dollar rate of export income monetization will remain at Tk 99 per dollar as before. In the case of payment of import liabilities and inter-bank transactions, price of dollar will be Tk 1 higher than the average price of a dollar bought from expatriate and export earnings. At the end of the meeting, BAFEDA Chairman Afzal Karim told the reporters, “There was supposed to be a price review from time to time to keep the dollar market normal.” “In continuation of this, we have decided the new price. The new price will be effective from October 1,” he said. Read How to safely send remittance to Bangladesh?

We are in the middle of the first full working week since Bangladesh’s declared adoption of a floating exchange rate for taka against the US dollar, paving the way for the forces of demand and supply - in a word, the market - to determine the rate going forward. Bangladeshi officials however, have a history of such utterances, without the necessary follow up actions. Most famously perhaps, there is even a formal commitment from 2003 (Bangladesh Bank. Exchange Rate Circular No. 01, 2003 – still available on the BB website), that the central bank subsequently abandoned. As a result, for almost its entire existence as a sovereign currency, taka’s value has been artificially set by the country’s monetary authority, i.e. Bangladesh Bank, and then allowed to float within a certain band - the so-called managed or ‘dirty’ floating exchange rate. Read: Banks reschedule loans worth nearly Tk 6000 crore, waive Tk 2800 crore in interest in first 6 months of 2022 In order to maintain the rate at or near its preferred level, the central bank would intervene in the currency markets to buy or sell dollars as the intervention currency. Maintaining an artificially overvalued rate in comparison to the market value, as Bangladesh Bank has almost always done, necessitates selling dollars from its foreign exchange reserves. Why now? But the “strongest dollar in a generation”, witnessed over the last year or so and likely to persist well into the foreseeable future, was starting to make the dirty floating system very expensive to maintain for Shapla Chattor, rapidly depleting its reserve of dollars. In the 2021-22 fiscal, that ended on June 30, Bangladesh Bank spent $7.62 billion from the country’s foreign exchange reserves as it scrambled to slow down taka’s slide against what some are calling “the hideous strength of the dollar.” In the first two months of the current fiscal, July-August, that coincided with a period in which even the government was forced to recognise the impacts of a range of worrying signs for the economy, it escalated dangerously. Read: Bangladesh received over $1 billion remittance in Sep 1-15 During this period, the central bank spent a further $2.85 billion on shoring up its preferred, overvalued rate, or rates, as it kept stretching to hold on, for taka against the dollar. If you annualise that, you’re looking at spending over $15 billion over the course of the fiscal. Probably more, with all the signs being that US Federal Reserve policies are likely to strengthen the greenback further over the foreseeable future. At a time when the quite rapid depletion of the forex reserves from its peak of $48.1 billion in August 2021 to some $37 billion at the moment has become a matter of concern (and the IMF credibly contending that effectively it is a further $7 billion less), the central bank has been forced to realise it is unsustainably costly to hold on. It has to let taka float. Read Uniform rate: Tk 108/dollar max for remittance, Tk 99/dollar for export income from tomorrow Does it mean BB will not sell dollars again? What that basically means is to adopt a hands-off approach. To refrain from using its intervention tools. Importantly though, it doesn’t give up its authority to do so. It may become interventionist again, at any point - unless it gets to a point where you are charged as a ‘currency manipulator’, as the US did with China in 2019, there is nothing really to give you pause even, once you decide to do it. There is nothing to bind you to ‘letting it float’. And central banks can be clingy. There are no purely floating currencies, it’s all a bit relative. Canada has had a floating exchange rate for longer than any other country. The Canadian national bank has not interfered with its dollar’s price since 1998. The US dollar is a close second. By contrast, Japan and the UK intervene to a greater extent, and India has medium-range intervention by its national bank, the Reserve Bank of India. What kind of exchange rate regime a country maintains over a given period is actually a call that can only truly be made after the event, when you have the data to tell you to what extent there may or may not have been intervention. It’s a bit like assessing whether you’ve been faithful in a relationship or not - you cannot have it up front. You have to look back. Read ABB, BAFEDA will meet tomorrow to set uniform dollar rate for banks But a commitment can be important, and the closest thing resembling such a commitment for Bangladesh Bank that suggests it is preparing to go further this time than it has gone before to letting the currency float came last week: for the first time, Shapla Chattor appeared to accept a suggested rate from the market, along with a mechanism for determining it on a regular basis going forward. What is the market rate? The task for coming up with the market-determined exchange rate had been left to the Bangladesh Foreign Exchange Dealers' Association (Bafeda), in consultation with the Association of Bankers Bangladesh (ABB). After months of meetings between the three parties, last week (September 11), the rate put forward by them, along with a mechanism - a weighted average based on actual transactions over the previous 5 working days - was accepted by Bangladesh Bank in a meeting, and subsequently announced. Since September 13, this rate has been published on the BB website as the nominal rate for the dollar, along with the following note: “Exchange rates of Taka for inter-bank and customer transactions are set by the dealer banks, based on demand-supply interaction and indicative rates suggested by Bangladesh Foreign Exchange Dealers' Association. Bangladesh Bank is not in the market on a day-to-day basis, and undertakes USD purchase or sale transactions with dealer banks only as and when needed to maintain orderly market conditions.” Read Foreign exchange rate stable after Bangladesh Bank tightens spending Note the phrase "as and when needed" - it tells you that should the need arise (most likely if the government perceives taka has depreciated too much), the central bank still reserves the right to intervene and effectively override what it has committed to. There will be teething issues - reports suggest Bangladesh Bank is still selling dollars, but if it stays the road, this will taper down. There are criticisms of the agreement entered into with BAFEDA, in particular how it creates three different dollar rates - one for exporters, one for remitters and one for importers. And leaving the exchange rate to the market while holding on to a fixed interest rate regime (interest rate on lending is currently capped at 9%) goes against conventional wisdom in economics. These are issues we will get to explore in future. Explainers related to the economy are vetted by economists. Read BB eases outward remittance rules for foreigners

Bangladesh Bank’s move to reduce its foreign currency spending has resulted in a measure of stability returning to the market, following a period of freefall in taka’s exchange rate over the last four months. The central bank recently introduced a series of regulatory measures to rein in the indiscipline taking hold in the currency market, that long operated as a sort of ‘Wild Wild West’ in the state’s regulatory apparatus – largely unbound. The volatile forex market has regained a sense of stability following implementation of the measures, that were both punitive and policy-based in nature.  The value of the US dollar, against which taka is pegged, stood at Tk 95 (the interbank rate) and between Tk 98-100 in the kerb market, where at one point it had reached a dizzying Tk 120 per US dollar over the summer. The new regulatory measures have mostly been implemented under Governor Abdur Rouf Talukder, who only took over after joining as Bangladesh Bank Governor on July 12, 2022, has taken measures to bring the activities of banks and non-bank financial institutions (NBFIs) under strict monitoring. He formed several teams led by deputy governors for inspection and monitoring of banks and NBFI activities. Read: Individuals can’t hold foreign currencies more than $10,000: BB Despite the central bank guidelines and instructions, several banks have been defying the rules of foreign trade, be it during LC opening, dollar trading, and even spending of forex through credit cards. Against this backdrop, Bangladesh Bank asked 27 banks to explain unusual instances of forex spending. The central bank found such excessive spending under 71 credit cards issued by the banks. The size of the transactions each range from USD $12,500 to $20,000. Bangladesh Bank spokesperson and Executive Director Sirajul Islam told UNB that the banks have been asked to explain the irregularities. He said that there is a $12,500 spending limit on each card. But a review by Bangladesh Bank revealed that many banks have allowed far greater sums to be transacted above this limit. According to the Foreign Exchange Control Act, a person can spend a maximum of $12,000 worth of foreign exchange per year. If anyone wants to spend more, in sectors including medical treatment and education, he/she must secure the central bank’s approval in advance. Earlier, credit facility for the import of some products was taken away, the margin rate has been increased. In one of the most talked-about moves that caused quite a stir in the country’s financial sector, the Treasury chiefs of six private sector banks  - 5 domestic, and the multinational Standard Chartered Bank - have been removed from duties for making unusual profits from selling dollars. Show-cause notices were served to the managing directors of these banks. Later, Bangladesh Bank fixed a ceiling of Taka 1 profit per dollar to bring stability in the foreign currency market. In further such measures, on August 31, the central bank issued a notification that individuals cannot hold on to $10,000 for more than a month. Whoever happens to be in possession now of an amount exceeding the limit has been asked to sell the balance by September 30 – otherwise, they risk facing legal action. Professor Mustafizur Rahman, distinguished fellow at the private think tank CPD, told UNB that the central bank has taken the right measures by curbing dollar spending. He said that it is possible to save around one-third of forex reserves by tightening unusual spending on imports and other sectors.

Prime Minister Sheikh Hasina on Sunday urged the youths to set up export-oriented fish processing industries to help boost the country's foreign exchange earnings. “We can process the fish or we can produce various types of products from fish and export those," she said while launching the National Fisheries Week 2022. The premier hoped that the new generation will come forward further to set up such industries that will create employment opportunities for the jobless. This year's July 23-29 Fisheries Week began with the theme 'Nirapad Machhea Varbo Desh, Bangabandhur Bangladesh (The country will be filled with safe fish, Bangabandhu's Bangladesh)'. The programme was held at Bangabandhu International Conference Centre, joined virtually by the PM from her official residence Ganabhaban. Regarding the 100 economic zones across the country, she requested the young generation to set up their industries there. She also stressed the need for establishing food and fish processing industries in the economic zones. Hasina said that fish processing industries will also contribute to meet the domestic demands. “I believe that by this way we will be able to advance our country further,” she said. She urged all to remain alert against catching shrimp fry by net along coastal areas, including Cox’s Bazar and Kuakata, as this destroys many other varieties of fish fries. The prime minister put emphasis on utIlising Haor areas of the country for fish production.

Bangladesh Bank (BB) further relaxed outward remittance rules for foreigners working in the country’s economic zones (EZs), export processing zones (EPZs) and hi-tech parks (HTPs).

Prime Minister Sheikh Hasina on Wednesday announced 'Light Engineering' as the product of the year to give special attention to this sector for earning more foreign currencies by exporting various products.