Last week, Mr. Saiduzzaman, former finance secretary, who later became advisor in charge of the Ministry of Finance during the Ershad regime, gave an overview on the matter (The Prothom Alo). His analysis was concise but quite comprehensive. According to him, the current balance of payment problem is paradoxical, as the country has experienced record quantity of exports as well as record remittance in the recent time.

According to knowledgeable sources, the dollar crisis erupted all of a sudden right after National Board of Revenue (NBR) took initiatives to verify credit card and bank accounts in order to locate the tax evaders. As the initiative was announced, hundreds of people withdrew billions of Taka from local banks, converted them into dollar and started to transfer to banks in Singapore and Hong Kong, among other countries. It is this very reason for which the dollar crisis suddenly cropped up in the Forex market early this year. While anticipatory 'capital flight' causing forex crisis is a common phenomenon in the world, such an unorthodox 'currency flight' to avoid taxman's long arm is rather uncommon.

During the past 35 years, we have devaluated Taka time and again, but we have not pondered how fruitful it has been. Today, an inquiry is needed to scrutinise what we have gained really from the devaluation of Taka upon persistent pressure from IMF and foreign aid donors, in terms of real growth of exports.

In conclusion, we want to emphasise with confidence that there is no chance of resolving today's current account deficit by devaluating Taka. As we have noted, devaluation of Taka will bring about many unanticipated problems instead of boasting the export volume. We believe that the 'currency flight' period is over or nearing an end. At this point, measures should be taken to reduce import bills and ensure faster utilisation of foreign aid.

We are in favour of Bangladesh Bank's interventionist policy at least till December. Whether devaluation is unavoidable can be considered in January.