Foreign exchange crisis and its impact on MJL Bangladesh PLC : a case study

Abstract

Bangladesh's foreign exchange reserves have been rapidly decreasing in the post-pandemic period, owing to the worldwide hike in fuel prices, slower-than-expected remittance inflows, and dramatically higher import payments compared to exports. With the demand for the dollar outweighing forex inflow, the value of the taka against the dollar has plummeted, causing a crisis in the import of necessary fuel or raw materials. As businesses struggle with further inflationary pressure, the liquidity crisis in the banking industry is likely to dampen private investment and growth. Under such precarious conditions, the heavily importdependent organization, MJL Bangladesh PLC, has earned a standalone net profit of Tk. 2187.7 million, reflecting a 2% growth from the previous year. The case study provides a synoptic qualitative analysis of the various impacts of the foreign exchange crisis on MJLBPLC, and the relevant measures taken by the organization to survive under this turbulent macroeconomic setting. The main areas of strength have been found to be the strong brand resilience, sound fundamentals, stable inventory, and constant customer engagement initiatives of the company. The core challenges have been identified as lower industrial and automotive demand caused by reduced general purchasing power, and substitution to cheaper and lower grade lubricants.