Our Angle to Euro
Euro has made its debut in Bangladesh, never mind the minuscule scale on which this happened here Monday, the first day it operated in countries outside Europe where its historic introduction coincided with the first day of the new year. Ten deals worth 25 lakh Euro were struck on the inter bank financial market in Dhaka. And an Euro was valued at Tk 57.60, higher than the dollar rate which itself gained over yen on the day.
It is more of a watch-out phase for Bangladesh than a preparedness one. After all, the Euro will circulate concurrently with the major currencies of the world and its rate will be centrally fixed vis-a-vis the basket of currencies for three years to come. Till such time as the Euro comes unstuck from other currencies and begins to rule entirely on its own relative strength, with the four European currencies now keeping outside the Euro pale joining in, a modicum of preparation would be involved, but not of a kind to feel nervous about. Calculations can be left to the programme-friendly computer, and so long a 'trangulation' is not encountered by way of value adjustment among three currencies with one of them keeping out the union, there is not much of a hammer-and-tong preparatory exercise ahead of us.
But we have a lot of watching out to do - that's for sure. The Euro-zone is the destination of 45 per cent of our exports and the 11 European countries that have adopted the Euro have a considerable degree of dealings with us. Furthermore, because of the unification of currencies in Europe and the consequent cohesive costing, pricing and interest rate adjustments it is possible that Europe could become the favourite destination for investments. The other thing that we have to watch out for relates to a conjecture that owing to a new regime of inter-currency adjustments foreign aid climate might dim a bit for the developing world. The impact that Euro is bound to have on WTO 'free trade' formulations would merit a thorough study for sometime to come.
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