Currency and Economic Development in Developing Countries: A Qualitative Study

<p dir="ltr">Abstract<br>Background: Currency stability is vital for economic development in emerging economies such as Bangladesh, where volatility in the Bangladeshi Taka (BDT) directly impacts business confidence, trade competitiveness, and foreign investment. While the economy has expanded through exports, remittances, and services, recent challenges—including 12.7% depreciation of the BDT in 2024 and “inflation exceeding 11%”—have exposed vulnerabilities in development-driven sectors.</p> <p dir="ltr">A qualitative approach was employed, drawing on semi-structured interviews with business owners, financial actors, and policymakers. Stakeholder experiences were analyzed alongside macroeconomic data from 2022–2025 to assess coping mechanisms and policy implications.</p> <p dir="ltr">Materials & Methods: This study adopts a qualitative approach to examine the intersection of currency policy and development-driven business practices in Bangladesh.</p> <ul> <li> <p dir="ltr">Design: Semi-structured interviews with RMG entrepreneurs, remittance-dependent small businesses, banking officials, and policymakers.</p> </li> <li> <p dir="ltr">Data Collection: Narratives focused on trade disruptions, pricing strategies, and adaptation to fluctuating exchange rates.</p> </li> <li> <p dir="ltr">Analysis: Thematic coding was used to identify recurring behavioral and strategic responses, contextualized with macroeconomic indicators from 2022–2025.</p> </li> </ul> <p dir="ltr">Results: Findings reveal that BDT depreciation raised import costs and compressed profit margins, while exporters gained only temporary competitiveness. Remittances—reaching US$30.32 billion in FY 2024–25—emerged as a stabilizing force, though delays in banking channels limited their effectiveness. Inflation eroded purchasing power, weakened domestic demand, and increased wage pressures. Exchange-rate regime shifts and delayed central bank interventions further heightened uncertainty, prompting firms to delay investment and adopt informal hedging practices.</p> <p dir="ltr">Conclusion: Currency fluctuations in Bangladesh create short-term export advantages but long-term inflationary pressures. Remittances play a crucial stabilizing role, yet structural inefficiencies reduce their full impact. Effective policy communication, timely interventions, and access to hedging tools are essential for sustaining confidence. With prudent management, currency policy can shift from being a source of instability to a lever for sustainable growth in Bangladesh.</p> <p dir="ltr">Keywords: ; Economic Development; Developing Countries; Fiscal Policy; International Economics</p> <p dir="ltr"> </p> <p> </p>