Bangladesh Bank Governor Ahsan H. Mansur has announced that the exchange rate of the US dollar will now be determined by market forces.
Speaking at a press conference organized by the central bank, which he joined online from Dubai, he stated, “We hope the rate will remain close to the current level.”
The move comes after months of negotiations between Bangladesh and the International Monetary Fund (IMF) regarding a market-based exchange rate.
The delay in disbursing the IMF`s loan installments was largely due to Bangladesh’s reluctance to make the dollar rate flexible.
However, it was revealed yesterday that Bangladesh has agreed to allow greater flexibility in the exchange rate, prompting the IMF to approve the release of two pending tranches from its $4.7 billion loan program.
Governor Mansur said this is the right time to adopt a market-based exchange rate due to several favorable economic indicators.
“Remittance inflows are strong, foreign exchange reserves are stable, and the balance of payments has improved. We expect $3.5 billion in remittances by June, which will further boost reserves. That’s why this is a good time to let the market determine the exchange rate,” he explained.
