“Since the [US] Fed Rate hikes were initiated in March 2022, the Bangladeshi Taka has lost nearly 25% of value against the US dollar, and foreign exchange reserves plummeted as import costs and debt-servicing became more expensive,” writes Dr. Saim Amir Faisal, founder and CEO of a developmental social entrepreneurial organization called Citizens Programme for Human Development (CPHD).
“The Pakistani Rupee has lost nearly 45% of value against the US dollar, the economy is on the verge of a collapse, as inflation soars, and foreign reserves continue to plummet to record lows; foreign reserves as low as $3bn. The Sri Lankan Rupee plummeted nearly 50%, ultimately bankrupting the economy, as dollar denominated debt could no longer be serviced due to the tremendous loss in value of the Sri Lankan Rupee, import bills could no longer be met,” he writes.
In no way, shape or form does the author claim that the US Federal Reserve manufactured the currency crisis, but, there is tangible economic reasoning to suggest that the Fed rate was integral to the crisis unfolding.
Dr. Faisal refers to the US Fed rate hike, between 1997 and 1998, which had a debilitating effect on Asian economies including the likes of Thailand, Malaysia, Indonesia and South Korea – known as the Asian Financial Crisis.
“The Thai baht was one of the first currencies to come under pressure, with speculators betting against the currency and pushing it to devalue in July 1997. The baht lost more than half of its value against the US dollar over the course of 1997, triggering a wave of contagion, as investors began to flee other Asian currencies as well.
“The Malaysian ringgit and the Indonesian rupiah both saw sharp devaluations in the following months, and the South Korean won also came under increased pressure by currency speculators” reads the write-up by Dr. Faisal.
Like this thought-provoking piece, with a number of takes on a range of issues – covering diplomacy, governance, policy and politics – a specialist English language blog “The Confluence” was launched yesterday.
“In the current social media-driven, live update culture, we often miss the necessary contexts, including the backgrounds,” said founder and publisher of The Confluence, Barrister Shah Ali Farhad, who holds a Master of Public Policy degree with ‘Merit’ from Blavatnik School of Government, University of Oxford.
The ultimate challenge comes when perceptions are created based solely on such short-form content. With the objective to “globalize the local of Bangladesh”, The Confluence intends to fill those gaps with the requisite details through expert commentaries and analysis, according to the site’s objective.
Renowned journalist and author Syed Badrul Ahsan is the blog site’s Chief Editorial Advisor.
An interactive session was held at the launch, well-attended by the country’s senior journalists from leading local and international media outlets, who also stressed the need for such platforms that can bring insightful perspectives in policy discourse.
“We are happy to welcome articles that seek to bring in fresh perspectives into even contested issues,” said Barrister Farhad.
Somoyer Alo Executive Editor Harun Ur Rashid, who is also a correspondent of DW Bangla, said, “It is important to have such platforms to offer space for policy debates,” – pointing out a lack of such initiatives.
Gazi Nasiruddin Khokon, who held senior ranks in prominent national media outlets, said that this initiative deserves attention but also advocated for strong adherence to a set of principles.
Absence of such platforms often lead to the rise of speculation-driven narrative on certain policy issues as often relevant experts are not even quoted and disinformation reigns supreme, added Nurul Islam Hasib, a senior journalist.
Visit the blog: https://theconfluence.blog/