Falling Euro Affects Bangladesh's Main Export Sector Revenue

Bangladesh's main export sector may be adversely affected by the depreciation of the euro, such as the profits of clothing and food industries may be weakened. For export companies, this may be a double blow. They are also worried about the new challenges brought about by the Greek debt crisis.

Last week, the euro fell to $1.2142, a 4 year low and has fallen more than 13% since January. Abdus Salam Murshedy, President of Bangladesh garment manufacturers and Exporters Association (BGMEA), said that if the euro depreciates, if the euro is converted into dollars or Taka, the profits of garment enterprises will be reduced.

Murshedy said the decline in the value of the euro may have serious impact on the income of garment exporters, but the price of clothing in the global market has not yet been raised. Bangladesh exported 60% of its exports to the EU last year, while the EU is the main export market of Bangladesh.

In 2009, Bangladesh's exports increased by 6.3% to $5 billion 800 million, while exports from China, India and Vietnam fell sharply. The exports of these three countries decreased by 13.4%, 13.9% and 9.5% respectively.

Bangladesh Bank estimates that the euro is so volatile that Bangladesh lost more than 240 million dollars in exchange this month.