Market-based exchange rate within third quarter of 2023

The Bangladesh Bank will no longer quote specific rate for buying or selling foreign exchanges, promoting stability in the foreign exchange market, it said today.

The central bank will adopt a unified and market-driven single exchange rate regime allowing the exchange rate between Bangladesh's taka and US dollar or any other foreign currency to be determined by the market force, it said in the monetary policy for the July-December period of 2023.

The BB's disclosure comes months after it allowed multiple exchange rates for exports, imports and remittances announced by the Bangladesh Foreign Exchange Dealers Association and the Association of Bankers Bangladesh.

"With BB's initiatives, the initial gaps among the rates have significantly reduced, and, by now, they are staying within 2 percentage points variation mark," it said.

"A competitive and market based floating, flexible and unified exchange rate regime is expected to be established for all international transactions within the third quarter of 2023."

The BB expected that the market determined exchange rate would gradually close the gap between formal and informal markets and help improve balance and international reserve, ensuring exchange rate stability.