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Currencies |
| BANGLADESHI TAKA |
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| Introduction
| Overview | Structure
| History | Factors
affecting change in exchange rates | Daily
trend of Bangladeshi taka | Weekly
trend of Bangladeshi taka |
| Introduction |
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Taka has been the official currency unit of Bangladesh since 1972.
The subunit of taka that divides 1 unit of the currency into 100
equal parts is "paise". It is often depicted by "৳"
or "৲"
symbols in the local language of the country and as "Tk"
in the English language. According to the International
Organization for Standardization, 4217 standard, Bangladeshi taka
is assigned with BDT as the currency code and 050 as the numeric
code.
The word "taka" is derived from the Sanskrit word
"tanka" that was used as a denomination for a silver
coin of a certain mass. The wide usage of the word in India for
money reference in general especially in Bengal was the reason
that it was made the national currency of this "Bangla"
speaking country.
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Overview
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Bangladesh is an underdeveloped nation and encounters major threat
from the ever-growing population. Though it has made remarkable
improvements since the time it gained independence, still the
overpopulation factor keeps it behind as compared to other
countries. Bangladesh has got a giant garment industry that is
counted among the largest in the world and also a huge jute
industry that earns the foreign exchange of the country. The
country is able to feed its massive population as it also produces
rice up to third highest quantity in the world. Bangladesh was
named one of the "Next eleven" countries along with
major players like Egypt, Indonesia and Pakistan. The foreign
direct investment has been observed with a sharp rise in the
recent years.
But on the other hand, this fact remains that Bangladesh is the
poorest countries in South Asia as half of its population is
living under the poverty line and the number of poor people stays
third highest in the world after India and China. The country has
received huge foreign aids since the time it is independent and
the economy runs on high trade deficits. Also, the country faces
natural obstacles in the way of its growth and development in the
form of frequent cyclones, floods and droughts. The currency of
Bangladesh isn’t strong enough and there is more scope of
improvement in currency status. The flow of currency is managed by
imposing import and export restrictions that are more than 500
taka of the local currency cannot be imported or exported.
Regarding the foreign currency, amounts more than 3000 US dollars
is needed to be declared and foreign currency can be exported only
up to the amount imported.
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Structure
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Bangladesh has got the basic unit of currency as
"taka" that is divided into 100 equal
paise, a subunit also used for rupee form of
money. It also has a wide range of denominations
issued in both coinage and paper currency form
that results in a bit complex structure of
currency. Moreover, the old banknotes still in
circulation along with the new ones makes it
bulkier as compared to other currency
structures. The Bank of Bangladesh, that was
once State Bank of Pakistan looks after the
currency flow in the country and performs
issuing and printing function, as it serves as
the central bank of the country. The coinage in
the currency is issued in total 8 face values
namely 1 paisa, 5, 10, 25 and 50 paise, 1, 2 and
5 taka. Among these face values, most of them
are not frequently used especially the smaller
denominations excluding 1, 2 and 5 taka, which
are frequently used. All the coins have the
Bangladeshi national emblem embossed on their
obverse sides with different symbolic images and
their denominations on their backsides. Also,
some coins had been minted time to time in
different shapes and colors that adds up to
various different versions of coins. The details
of different versions of coins and images on
their backside are mentioned below
The banknotes in
Bangladeshi taka are printed in 8 face values
ranging from 1 taka to 500 taka including 1, 2,
5, 10, 20, 50, 100, 500 taka. The two of the
smallest face values i.e. 1 and 2 taka banknotes
are issued by the Government of Bangladesh
though they are gradually being replaced by taka
coins. The rest of the notes are issued by the
Bangladesh bank and there are currently 35
banknotes in circulation in total of all the
denominations. All the notes can be
differentiated from each other on the basis of
their colors, and also different symbolic images
on the front and the backsides of notes. The
last time 1 taka note was issued was in the year
1979 and 2 taka note was issued once in 1988.
Other banknotes had been reissued with new
colors and images time to time. In the year
2000, the central bank came up with a polymer
note of 10 taka but that proved to be
unsuccessful and un popular. The recent issue of
banknotes in 2006 that had only 4 banknotes i.e.
5, 10, 20 and 100 taka was the 10th issue of
banknotes in the country. The information
regarding the latest issues of the all the
denominations is mentioned in the following
table
- 1
taka note (1979) - A pictorial
representation of the national emblem of
Bangladesh is depicted on the front side and
a picture of three spotted deer on the
backside
- 2
taka note (1988) - Obverse side shows image
of Shahid Minar of the language movement and
national bird "Doyel" is depicted
on the reverse
- 5
taka note (2006) - Picture of Mehrab of the
Kusumbag Mosque is shown on the front side
and the reverse side posses a landscape
image showing industries with two sail boats
- 10
taka note (2006) - The obverse of the note
have an image of the national mosque of
Bangladesh "Bait UL Mukarram" and
the backside possess the image of national
parliament building
- 20
taka note (2002) - Picture of Choto Sona
mosque on the front and an image showing 4
men washing jute in the water on the reverse
side of the note
- 50
taka note (2005) - The front of the note
possess an image of national parliamentary
building and reverse side has a pictorial
representation of Bagha mosque
- 100
taka note (2006) - Image of National
Memorial on the obverse and image of Jamuna
bridge on the reverse side
- 500 taka note (2004) - The obverse side
possess the images of National monument and
Saat masjid and the supreme court building
is shown on the backside.
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| History |
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The history of currency in Bangladesh had been
parallel to that of the history of currency in India
as Bangladesh was once of part of Bengal in India. The
first coins in the country are said to have been
minted in as early as 2nd century BC though no proof
for the same is available. The earliest evidence of
coins comes from the late Gupta period in which gold
coins were issued. Later on when Muslim rulers began
to raid Northern India including Bangladesh, Indian,
Islamic and Burmese coins that were prevailing for
over 500 years got replaced with coins with Arabic
inscriptions. The Delhi Sultanate was established that
gave way to silver coins called "tankas" in
large amounts followed by the coins issued by local
governors between 1339 till 1538.
In 1556, Mughals took control of
the Delhi Sultanate again and under the reign of first
Mughal emperor, Akbar, silver rupees and gold mohurs
were issued. During the 18th century, the world
witnessed the collapse of Mughal Empire and the
British started to gain control of Indian
subcontinent. The British East India Company annexed
Bengal and the circulation of "Calcutta
rupees" started within its territory. In 1818,
the Madras rupee also called the "Company’s
rupee" was made the standard currency for all
India and from 1838 on, Calcutta rupees ceased to be
the legal tender. The British made an effort to make
India gain a quasi-bimetallic status in terms of
currency and as a result gold mohur was also made
legal tender, though only for government payments. But
with in a short span of time, it was also withdrawn
and leaving the country to a silver standard. In 1862,
the control over India got transferred to the Indian
colonial government from the East India Company.
The silver rupee was standardized
and its value was pegged to the British pound. Indian
rupee’s value was based upon the change in the value
of silver and gold but in 1893, the currency was made
to adopt a gold standard. An exchange standard with
Pound Sterling was fixed in 1899 making the British
gold sovereign a legal tender in India. The historical
event of partition of Bengal took place in 1905,
dividing it into two parts, Muslim dominated east
Bengal and Hindu dominated west Bengal. Though this
partition was reversed in 1912, it provided with first
signs of formation of Bangladesh in future. The
banknotes in Indian rupee denomination were printed by
the government of India from 1861 till 1937, when the
Reserve Bank of India was established and after that,
the bank took over this function. When India got
independent, Pakistan was also formed with East Bengal
as a part of Pakistan known by the name East Pakistan.
During the time, East Bengal was
a part of Pakistan, Pakistan rupee was used as the
official currency in there. In 1972, East Pakistan got
its independence and was renamed as Bangladesh.
Although all this time rupee was national currency of
India including Bengal, the word "taka" was
popular among the Bengali people to refer to money in
general and hence the currency unit "taka"
was created as and adopted as a national currency of
Bangladesh.
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| Factors
affecting the exchange rates between two countries
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The volatility in the foreign exchange rates
depends upon a numerous macro economic factors that
have different degrees of importance to different
economies of the world. Some special and exceptional
factors affecting the rates may also exist in the case
of different countries. Following are shown the common
factors on which the foreign exchange rate depends
- Flow of imports and exports between the
countries
- Flow of capital between the countries
- Relative
inflation rates
- Fluctuation limits on exchange rate
imposed by the governments of the countries
- Merchandise trade balance
- Rate of inflation in the country
- Flow of
funds between the countries for the payment of
stock and bond purchases
- Relative growth
- Short term
and long term interest rate differentials
- Cost of borrowings
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