Pound dips below Tk 100 amid global rout

Staff Correspondent | Published: 00:52, Oct 05,2016 | Updated: 01:35, Oct 05,2016

 
 

The exchange rate of the British currency pound sterling against the Bangladeshi currency taka slumped to below Tk 100 in last two days in line with the global trend following the British prime minister Theresa May’s announcement on Sunday that her government would start the process of leaving the European Union within the next six months.
The British currency also lost around Tk 17 in last two months in line with the global trend of weak pound due to the British referendum to leave the EU.
Bangladesh Bank data showed that before Tuesday the lowest level of pound against the taka was in June 2010 when its average value was around Tk 100-Tk 101. After that it hit the highest level at Tk 133.63 in February 2012.
Data of different private and state-run commercial banks showed that selling rate of pound came down to Tk 101-Tk 102 on Tuesday from around Tk 102-Tk 103 on Monday while buying rate fell to Tk 97.35-Tk 98.07
from Tk 98.83-Tk 98.20.
Bangladesh Bank officials said that as the pound had been falling for last few days across the globe against the major currencies including the US dollar following May’s announcement, the British currency also fell against the taka on Monday and Tuesday.
At Sonali Bank, the pound was purchased at Tk 97.35 on Tuesday, while the currency was purchased at Tk 98.20 on Monday.
At Eastern Bank, GBP was sold at Tk 102.68 and bought at Tk 98.07 on Tuesday, while the currency was sold at Tk 103.45 and bought at Tk 98.83 on Monday.
The pound slumped to a 31-year low against the dollar Tuesday on concerns over the timing and terms of Britain’s planned exit from the European Union, traders said, reports the Agence France-Presse.
Britain’s currency also struck a fresh three-year low point against the euro, while the drops helped pushed London’s benchmark FTSE 100 stocks index up to a 16-month high beyond 7,000 points at the open.
While the British economy has showed signs of improvement in the months since the shock vote to leave the EU, there are concerns about the wider long-term impact of the bloc losing its second-biggest economy.
The pound on Tuesday struck $1.2740 — its lowest level since 1985.
Sterling meanwhile traded at 87.66 pence to the euro — the weakest level since 2013.
‘It seems that it is going to be hard to provide a tourniquet for sterling’s recent wounds given the solidity of the newly announced Brexit timeline,’ said Connor Campbell, analyst at traders Spreadex.
In terms of silver linings, the pound’s protracted demise has continued to lift the multinationals that make up the FTSE 100, leaving the index back above 7,000 for the first time in 16 months, he said.
‘The reality is the biggest stocks in the index dominate its performance, and the likes of HSBC, Royal Dutch Shell, and British American Tobacco all have international earnings which are now worth more in pounds and pence thanks to sterling’s decline,’ said Laith Khalaf, senior analyst at stockbrokers Hargreaves Lansdown.
Anwar-Ul-Alam Chowdhury Parvez, former president of the Bangladesh Garment Manufacturers and Exporters Association, said that the prices of readymade garment products would decline in the UK market due to the devaluation of its currency against the US dollar.
Some buyers have already started negotiation for cutting price of products as the depreciation of the pound hit the purchasing power of the UK consumers, he said.
‘We are yet to get any indication to decrease export volume to the UK due to the depreciation of its currency but it may happen in the coming months,’ Parvez said.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

images

 

Advertisement

images