The exchange rate of the taka and the US dollar is going to be turned more flexible in line with suggestions of International Monetary Fund (IMF), according to Bangladesh Bank.
Currently, there is a crawling peg exchange rate system in place and banks are allowed to buy and sell US dollars freely at a mid-range of Tk 117.
The crawling peg is a system of exchange rate adjustments in which a currency with a fixed exchange rate is allowed to fluctuate within a band of rates.
Introduced in May of this year, this new system is not fully based on the market.
Though this new system was in place, the majority of the country’s banks are now buying and selling each US dollar for over Tk 124.
A visiting delegation of the IMF emphasised the need for a flexible or market-based exchange rate during a meeting with senior officials of the central bank yesterday.
After the meeting, Husne Ara Shikha, executive director and spokesperson of the central bank, told The Daily Star that the IMF team suggested that Bangladesh introduce a market-based exchange rate system.
She said the central bank would issue a circular soon in this regard as per the IMF suggestion.
Another official of the central bank said the BB has plans to publish a reference rate for foreign currencies based on daily bidding rates provided by banks.
He said the banking regulator now aims to align the reference rate with the rates at which banks buy and sell US dollars.
The IMF concluded its two-week-long official engagements in Bangladesh, reviewing progress under its $4.7 billion loan program.
Bangladesh has already received $2.3 billion since 2023, with the next tranche expected by December.
The government has sought an extra $3 billion from the IMF.
On August 7, the IMF said it would continue its ongoing $4.7 billion loan programme in Bangladesh despite the change in government.
In another development, the IMF relaxed the net international reserves (NIR) target for March and June of next year considering the stress that the country’s economy was in due to high inflation, flood and recent political changeover.
The NIR is the difference between reserve assets and reserve liabilities.
The revised target will be disclosed soon, said central bank officials.
Till December of this year, the NIR target set by the IMF was $15.30 billion, but the central bank managed to maintain $14.90 billion till December 18.