Bangladesh Bank signals market-based exchange rate regime

Bangladesh Bank will switch to a market-based exchange regime, said BB Governor Ahsan H Mansur today. 

The central bank will allow the exchange rate of the dollar to be determined by market forces, moving away from the current system, the governor said.

Speaking at a virtual briefing, he said the central bank expects the rate to remain stable due to strong inflows from exports and remittances. 

"We believe the time is right. The current account deficit is manageable, and our reserves have risen without external support," he said.

Mansur clarified that it does not mean the dollar can be sold at any price. "We expect the rate to hover around the current level," he noted.

The governor also expressed optimism that the shift would help secure the next two tranches of the IMF loan programme by June.