Devaluation & Its Impact on Bangladesh Export.

Introduction:
Devaluation of money can affect in any economic system & can influence total production, total income, import & export. It may be positive or negative. But everything depends on the market system and economic policy of a country. The influence of devaluation of money is closely observed in Bangladesh. To increase export every year there is devaluation of money in Bangladesh.

What is devaluation of money?
To discuss about this matter we have to know about value of goods & service, value of money & quantity of money.

Value of goods & service: The quantity of money, which spends to buy goods & service, is called value of goods & service.

Value of money : Value of money means the purchasing power of money.

Quantity of money : Quantity of money means total prevalent money or currency in an economics.

Devaluation of money: The decrease of purchasing power of money is called devaluation of money.

How it occurs?
The value of money & quantity of money are directly related between each other. When quantity of money increases thus consumer gets more money than they had before. In this circumstance consumer wanted to fulfill their demand, but the resource are limited. So, in the same way price increase in the same rate and causes devaluation of money.

It is controlled by Central Bank. In Bangladesh it is controlled by Bangladesh Bank.

Influence of devaluation of money on export:

Devaluation is causes of inflation. It mainly affect on import & export. Due to inflation price of import items are rises and in other hand foreign traders can buy more items than the past. So export increase. But export doesn’t depend on only one variable. Production quality, quantity & international relationship etc. are also affect on export. The policy of devaluation money can enhance export if another variable are remain unchanged in an economic system.

Objectives of monetary policy of Bangladesh:

Bangladesh is a progressive country. Government of Bangladesh took a liberal monetary policy to rearrange and rehabilitation the economic base after independent. For this purpose government increase the supply of money. A gentle rising monetary policy observes in Bangladesh from the first.