Bangladesh Bank is set to transition to a market-based exchange rate regime, Governor Ahsan H Mansur announced on Wednesday.
In a virtual press briefing, the central bank chief said the exchange rate of the US dollar will soon be determined by market forces, marking a shift from the existing managed system.
“We believe the time is right,” said the governor. “The current account deficit is manageable, and our foreign exchange reserves have increased—without external assistance.”
However, he clarified that the move does not imply an unregulated float. “The dollar won’t be allowed to sell at any price. We expect the rate to remain around the current level, supported by robust export and remittance inflows.”
Mansur also expressed hope that the policy shift will help Bangladesh meet conditions to unlock the next two tranches of the IMF loan programme by June.