Many mainstream news outlets and social media, in their perverse knack of undermining Indian economy under PM Modi, had recently shared misleading news stating that the Indian Rupee had depreciated against Bangladeshi Taka. This, of course, comes at a time when the Indian economy is facing tough headwinds from global blues and other microeconomic factors that suggest definite retardation of the economy in FY 2019.
News Media outlet NewsX published an article titled “Forget US Dollar, Indian Rupee loses against Bangladeshi Taka now”. NewsX claims that the global slowdown has caused alarm bells as the Indian Rupee weakened against the Bangladeshi Taka. In the article, NewsX goes ahead mentioning that 1 Bangladeshi Taka = 1.18 Indian Rupee, which according to the article means that 1 Bangladeshi Taka is capable of buying 1.18 Indian Rupees. It further states that the Bangladeshi Taka performed best against the Indian Rupee before 2004 and after 2014.
These are nothing but grossly misleading assertions made by NewsX. Firstly, it is 1 INR that is equivalent to 1.18 BDT, and not the other way around. NewsX wrongly quotes that 1 BDT is equal to 1.18 INR. This despite the fact that in the screenshots they have used in the article to make such claims, it clearly shows that 1 INR is equal to 1.18 BDT.
Moreover, when 1INR is equal to 1.18 BDT, it means Indian currency is stronger than the Bangladeshi Taka and one has to shell out 1.18 Taka to get 1 Indian Rupee. Commodities bought for Rs 100 will have to be bought at approximately 118 Bangladeshi Taka. Consider 1 USD=71 INR, this doesn’t mean that the Indian currency is stronger than the USD. In fact, it means one has to spend 71 INR to acquire 1 USD which shows that USD is a stronger currency than the Indian Rupee. Historically, the Indian currency has always been stronger than the Bangladeshi Taka. Currently, the exchange rate is hovering around at 1 INR = 1.17 BDT.
Based on this flawed understanding of currency conversion, NewsX further infers that the weakening of Rupee against Bangladeshi Taka is catastrophic for Small Medium and Enterprise (SME) sector which is already facing competition from cheap imports from Bangladesh, Sri Lanka, China and other South-East Asian countries. This is purely speculation based, that too on a poorly interpreted exchange conversion between the Indian Rupee and the Bangladeshi Taka.
The Indian Rupee has certainly taken a hit in the recent days but it has never gone down below the Bangladeshi Taka. Furthermore, these swings in currency are cyclical and are dependent on multiple economic factors. Only obtuse minds will fall for this trope that since 1 INR is equal to 1.18 Bangladeshi Taka, the Indian currency is cheaper than the Bangladeshi Taka.