crying need for de-dollarization

 

                                

                                 

Dollarization means the full reliance on the US dollar in the country’s economy. Bangladesh's main source of income comes from garment exports to the United States, which is the country's largest buyer. Bangladesh imports most of its oil from the Middle East, and so for the import of oil diversification and a high price on the oil market for the sprawling war between Russia and Ukraine, Bangladesh could not direct import from Russia, a lucrative oil market with a competitive price for a reduction in the cost of oil and transportation, but it may be one of the reasons for US sanctions on our garment sectors. Following the recent conflict between Russia and Ukraine, Bangladesh considered purchasing oil from a third party, India, even though it would import oil directly from Russia. Bangladesh is trapped in dollarization because of a lack of confidence in local currency and banking systems, low public knowledge of its benefits, a high preference for US dollar transactions because of international business acceptance, and the preservation of the US dollar as a store of value for inflation.

In the world, trade settlement through DE dollarization has been actively promoted. Russia's approval for transaction settlement through the yuan, the most traded and relevant currency used globally, has the provability to build up new fund reserves by both China and Russia to compete with the US dollar. As a dialogue partner, Saudi Arabia's ties with the Shanghai Cooperation Organization grow a concern for western suppression, as do the first yuan-settled LNG trade with Total Energies, a French company, and recent conversations between Malaysia and India about use of the Indian rupee in trade and the BRICS block announcement of trade settled with their own common currency backed by a basket of commodities that may be gold and rare earth metals that threaten the currency reserve status of the US dollar. All these initiatives from different countries for diversification usage of currencies on trade are taken for de-dollarization only for the reason that the US dollar is dominant far on the world currency reservation.

 Bangladesh's fund reservation is mostly in US dollars, which leads to instability in the market. To reduce this dependency, Bangladesh is diversifying into different currencies. Additionally, Bangladesh is increasing the usage of its own currency, the taka, by strengthening monetary policy, creating employment opportunities, reducing fiscal deficit and inflation, encouraging local and foreign investment, and participating in regional organizations such as BRAC and Asian. By flourishing domestic industries and reducing foreign debt, Bangladesh aims to become less dependent on external sources for its economic growth.