Acute Crisis of Dollar Stress Amid Repayment of Foreign Debt

The dollar crisis is one of the strongest reasons behind today's weak economy of the country. Although there has been a dollar crisis for a long time, the dollar crisis in the foreign exchange market has taken a strong shape. Cash dollars in commercial banks are scarce. On the other hand, the sale of dollars in the curb market or open market has completely decreased. Even if there is, it has to be bought at a higher price.

During this dollar crisis, the public and private sectors of Bangladesh will have to pay foreign debt of about 12 billion or 1,000 billion dollars by December this year. Due to dwindling foreign exchange reserves and the dollar crisis, foreign debt repayment may become complicated, the stakeholders fear.

The international organizations Moody's Investors Service and S&P Global downgraded Bangladesh's credit rating, raising doubts about how much new credit will be available. Generally, due to reducing the credit quality of such companies, they may have to pay interest at a higher rate than the international market in getting foreign loans.

Meanwhile, traders are worried about the dollar crisis. Entrepreneurs are still facing problems in opening import letters of credit (LC) due to the dollar crisis. Due to the dollar crisis and price increase, production, investment, and trade are having a negative impact. This results in high inflation. People are struggling to meet the increased cost of goods. All in all, this situation is endangering the economy.