The taka has been devalued against the US dollar by 85 paisa, effective from today.

The new buying and selling rates of the dollar have been fixed at Tk 46.15 and Tk 46.45 respectively, the Bangladesh Bank announced yesterday.

The middle rate between buying and selling will be Tk 46.30 instead of Tk 45.45. the BB said adding: "The adjustment is pursuant to the continuing policy objective of maintaining incentives for exports and for Inflows from expatriate Bangladeshis; keeping in view the unfolding trends of currency values of trade partners and coinpetitors of Bangladesh."

Tne rates were last "readjusted" downward at Tk 45.30 and Tk 45.60 against the dollar on

November 24 last year from Tk 44.85 and Tk 45.15,

The taka has been devalued twelve times since the Awami League took office in June. 1996. It was devalued four times in the second six months of 1996. and seven times in 1997.

There had been more than 6.3 per cent devaluation of the Taka in 1997.

BB sources said the taka had been made cheaper against the dollar mainly because of pressure from the burgeoning garments sector and other exporters. who last week reiterated their demand for devaluation of the currency.

Exporters said Bangladeshi exports had been facing uneven competition from the neigh-hours due to the recent turmoil In South East Aslan economies that sent their currencies in a downward spiral against the doUar.

The BB sources said the readjustment also aimed at spurring • remittances from the Bangladeshis working abroad, who send home about one billion dollars annually.

The reserve stood at 1.66 billion dollars at the end of December. which is barely enough to meet three months of imports. The reserve dwindled to the current level from its peak at 3.4 billion in April, 1995.

Meanwhile, the devaluation received a welcome response from the business leaders. Ms Laila Rahman Kabir, president of Metropolitan Chamber of Commerce and Industry (MCCI) said taka's downward readjustment against dollar was on the right track.

But the massive devaluation within a short period was not expected because the country imported huge raw materials for its industrial production, she told The Daily Star last night.

The MCCI president said it would make the price of machinery and raw materials costlier. "But we needed the de--valuation since some East Asian countries devalued their currencies, sharply, which casts a shadow on export of Bangladesh's garments, shrimp and other products," she added.

Rashed Maksud Khan, president of Dhaka Chamber of Commerce and Industry (DCCI) called for striking a balance be-tween exports and imports so that the devaluation could not harm the economy.

He argued that making the taka cheaper was necessary to resist dumping of cheap imports from Indonesia or Thailand. "Dumping of cement, and other products might affect our local industries," Khan said.

The DCCI president said leaders of major chamber bodies including the Federation of Bangladesh Chamber of Commerce and Industry had a meeting with the Finance Minister on Wednesday where they discussed about current economic situation in the country.

But the devaluation could not yet make the garment exporters fully satisfied. "We have demanded that the government refix the value of one dollar at Tk 50." said Bangladesh Garment Manufacturers and Exporters Association vice-president Nurul Huq Sikder.

Sikder told The Daily Star last night that lowering the value of taka would not benefit them. "It will only help us to maintain competitiveness of our products in the international market."