StanChart makes case for Taka depreciation

Taka, which has remained quite stable against the US Dollar for the last few years, has become overvalued and some degree of depreciation is both likely and desirable, senior officials of the UK-based banking giant Standard Chartered said this week.

At the same time, the Standard Chartered team has called for upgrading infrastructure and easing the process of doing business in the country to enhance private investment in Bangladesh.

"Although the fundamentals are quite solid for Bangladeshi Taka, we are a bit concerned on the valuation front", said Divya Devesh, who is the Asia FX strategist for Standard Chartered Global Research team.

Devesh was part of a four-member team led by the Head of Standard Chartered Global Research Dave Murray who visited Bangladesh recently.

In a special interview, Mr Murray and his team shared their views on Bangladesh's financial environment, currency market and macroeconomic outlook.

Standard Chartered officials warned that although the impact of such overvaluation in the short term may be mixed, it is not sustainable from a longer term perspective.