Timely action needed to tackle market volatility

Against the backdrop of a very fraught and tense global economy, affected by the pandemic and the ongoing conflict in Ukraine, the PM's decision to call for immediate measures to contain arbitrary commodity price rise plus the volatility in the forex market is a reflection of sagacity. In the last one month, the world has seen several economies struggling to deal with unsettling market changes. A South Asian country is coming to the edge of an economic implosion.

The current war in Europe has disrupted the global supply chain, which is beginning to manifest in regional markets with prices of essentials going haywire, followed by a sharp rise in the dollar exchange rate.

There's also been a directive from the highest authority to assess the current market scenario, with Bangladesh Bank accurately asked to present a comprehensive picture.

These are indeed steps required at the moment because the global economy in the post-pandemic period has shown stark signs of unpredictability.

There is no doubt that the pandemic-clobbered world is still reeling from the impact of two years of sporadic lockdowns and trade impasses. The war in Europe, involving major powers, came at a time when countries were grappling with shedding the malaise and getting back to normal operations. If this conflict had not affected major economies, the global economy could have just brushed it aside. Unfortunately, top nations are involved either directly or indirectly, making Ukraine a major issue for developed and developing countries.

During Ramadan, the market in Bangladesh saw an abnormal price hike of essentials which did not come down after Eid. Wholesalers are blaming this on the war which needs to be investigated properly.

In addition, there is a general feeling of unease in society that has to be dissected. If some harmful impact has developed insidiously, the nation has to know about it and act accordingly.

In Bangladesh, the dollar was selling at between Tk. 84-87 just a few weeks ago, but the current rate is a little above one hundred, the first time in the country's history when the dollar exchange rate has touched the three-figure mark.

In normal circumstances, the dollar's appreciation boosts exports. Still, given the ongoing volatility of the global economy, this ascent will come as a bane for developing nations as import costs will skyrocket.

This is precisely why countries like Pakistan and Nepal, both our regional neighbours, have restricted the import of non-essential items.

The economic morass in Sri Lanka, which has meagre foreign currency reserves, is widely known, and the upheaval in the island nation, once an economic miracle, stands out as a chilling example of how a boom can turn into a bust if safety measures are not adopted on time.

Time and again, Bangladesh's robust foreign currency reserves plus a steady inflow of remittance have been cited as bulwarks against possible economic disaster. However, it would be prudent to take some precautionary measures. In a recent statement, the PM asked the nation to tighten the belt, avoid unnecessary expenses, and adopt austerity, which is the best advice given the current economic turbulence.

Understandably, the government's steps to capture the reality on the grounds will work as a wake-up call for all; however, the grim fact that a certain unethical section exploits crisis situation is something we cannot ignore. The recent edible oil shortage, created while oil was being secretly hoarded to be sold at higher rates, is another example of how profiteering rears its ugly head in times of uncertainty.

The government has put a cap on foreign travel by its officials to cut costs which has to be replicated by others.