BB introduces market-based exchange rate to meet IMF conditions

Bangladesh Bank has announced the implementation of a market-based exchange rate system starting Wednesday, aligning with key conditions set by the International Monetary Fund (IMF) for loan disbursement.

Bangladesh Bank Governor Ahsan H Mansur, attending virtually, made the announcement at a press conference held at the central bank’s headquarters on Wednesday.

He expressed confidence that the US dollar rate will remain stable due to strong inflows from exports and remittances.

"Bangladesh is expected to receive around $3.5 billion by June from various international development partners, including the World Bank, Asian Development Bank (ADB), and IMF," said the governor.

He noted that despite the shift to a market-driven mechanism, the central bank anticipates the exchange rate to remain close to the current levels, supported by sufficient dollar liquidity in the financial system.

Banks were briefed on the upcoming change during a meeting earlier in the day. Governor Mansur assured that the central bank will continue to intervene in the market when necessary, especially during large foreign currency transactions, to prevent excessive volatility.

The move to a flexible exchange rate is part of broader economic reforms aimed at securing IMF loan tranches and strengthening foreign exchange management in the country.