Abstract:
Abstract: An exchange rate system is important for a country to maintain economic
stability. The objective of this study is to calculate the real exchange rate between
Bangladeshi taka-Chinese renminbi and taka-Indian rupee to analyze the
Bangladeshi competitive positions in the bilateral export markets with her two
largest trading partners in Asia. Empirical results suggest that the Bangladeshi
inflation rate is relatively higher than that in the People’s Republic of China but
relatively lower than inflation rate in India, particularly since 2009. However, takarenminbi
and taka-rupee real exchange rates were consistent with the predictions by
the Purchasing Power Parity theory, whereby reserving Bangladesh’s relative
competitive positions in export markets with the two largest Asian economies over a
period during which many extraordinary events—political, economic, and
otherwise—occurred both in Asia and throughout the world.
