Analysts see no risks from US downgrade ==>> What a funny excuse by BD Analyst!!!!!!!

Star (August 07, 2011)

Analysts see no major negative impacts on the Bangladesh economy, as Standard & Poor's has downgraded the United States' AAA rating for the first time ever.
Leading credit rating agency S&P cut the long-term US rating by one notch to AA+ with a negative outlook, which raises concerns including an increase in borrowing costs.
The latest situation in the economic powerhouse has created a wave of uncertainty across the globe as debt crisis in the Eurozone is spreading fast.
The US is Bangladesh's largest single-country export destination. Moreover, majority of Bangladesh's foreign exchange reserve is in the US currency.
However, the analysts do not see major risks for Bangladesh.
“I don't expect any negative impact on Bangladesh's exports,” said Ahsan H Mansur, executive director of Policy Research Institute (PRI) and a former official of the IMF.
Bangladesh exported goods worth $22.9 billion in fiscal 2010-11. Of which $4.8 billion or 21 percent went to the US.
The downgrade may fuel further depreciation of the dollar and it may cause for a loss of export competitiveness, the analysts said.
But Mansur sees no fear of losing export competitiveness due to the devaluating dollar. “Competitiveness will be in our favour.”
Like other countries, around 60 percent of Bangladesh's foreign exchange holdings are in the US dollar that many analysts predict would depreciate further due to the historic downgraded rating of the US economy.
A senior Bangladesh Bank official said Bangladesh can gain from the situation.
“If the borrowing costs in the US go up, we'll get more returns from our investments there,” said the official. “If the US dollar falls against other currencies, we've no problem because it'll be counted on the taka,” he added.
Monzur Hossain, senior research fellow of Bangladesh Institute of Development Studies, said neither Bangladesh's economy nor its capital market is globally integrated.
“So, there is no fear of immediate impacts,” said Hossain.
On the trade side, he said the local economy would not be immediately affected.
“The resilience that Bangladesh showed during the global financial crisis still continues,” he said.