The exchange rate is the ruling official rate of exchange of Taka for other currencies. It determines the value of Bangladeshi goods in relation to foreign foods. If the Taka is devalued in terms other currencies Bangladeshi exports (which are paid for in Taka ) become cheaper to foreigners and Bangladeshi imports become more expensive to holders of Taka. What conclusion can be drawn form the information above?
There are certain disadvantages for the Bangladesh economy attached to devaluation
The prospect of devaluation results in a speculative outflow of funds.
The difference between imports and exports in called the Trade Gap.
It is possible that inflation neutralized the beneficial effects of devaluation
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