Bangladesh Bank will be returning to market-based interest rate from July with the announcement of the next half-yearly monetary policy statement, which will cover the first six months of the 2023-24 fiscal.  The central bank will also set a unified foreign exchange rate for all sectors, as per the guidelines of the International Monetary Fund (IMF). Also Read: Despite many challenges, Bangladesh remains one of the fastest growing economies in Asia-Pacific: Visiting IMF team Md Mezbaul Haque, executive director and spokesperson of Bangladesh Bank, said this today (Sunday) in a press briefing. The IMF team ended their visit Sunday, having arrived in Dhaka on April 25, to discuss the progress of implementation of the joint action plan for the  $4.7 billion IMF loan for Bangladesh. After the discussion with the IMF delegation, Haque briefed reporters regarding the discussions on Sunday. Also Read: Bangladesh’s GDP growth rate will overtake China’s in current fiscal year, IMF predicts  Meanwhile the IMF team has expressed satisfaction regarding the progress of reforms in different sectors, the spokesperson said. Explaining the introduction of a unified exchange rate, he said that a single foreign exchange rate does not mean that the buying and selling rate of the dollar will be the same. Now there are several exchange rates, but if the difference between them is within 2 percent, the exchange rate can be said to have a single exchange rate.  Also Read: IMF satisfied with progress of BBS’ GDP and inflation data updated under new method Apart from this, calculation of forex reserves according to the IMF's Balance of Payments and Investment Position Manual (BPM-6) will also be announced in the next monetary policy, Mezbaul said. The next IMF delegation will visit Bangladesh in October. Some of the reform measures to be carried out under the terms of the loan to Bangladesh are expected to be achieved by September. The IMF has already disbursed the first instalment of the sanctioned loan. Mezbaul said that the recently concluded visit of the IMF team has nothing to do with receiving the second instalment of the loan.    

A visiting delegation of the International Monetary Fund (IMF) on Tuesday met with the Bangladesh Bank (BB) Governor and discussed updated financial factors along with the progress of reform in the sectors. A five-member delegation headed by Rahul Anand, IMF Bangladesh Mission Chief, started meeting with the BB officials in the morning on Tuesday, which ended at 3.0 pm. Md Mezbaul Haque, executive director, and BB spokesperson told reporters that the IMF team discussed updated information on various economic factors with the several departments of BB including the progress in the use of the IMF's loan. He also said that the visit was a routine process of the IMF's work and the BB participated in the meeting on behalf of the state. Sources close to the meeting said among the issues prioritized in the discussion are efforts to unify multiple exchange rates, making lending interest rates market-oriented, and the process of calculating foreign reserves under the IMF definition. During its (IMF) April 25 to May 2 visit the mission will hold meetings with the officials of the Ministry of Finance's Finance Division, Financial Institutions Division, Economic Relations Division (ERD), Bangladesh Bank, and National Board of Revenue (NBR), sources said. Bangladesh applied to the IMF for a loan to stabilize the economy amid dwindling forex reserves and agreed to pursue reforms on certain issues. Read more: Bangladesh receives 1st instalment of IMF’s $4.7 billion loan: BB spokesperson Before and after receiving the first $476.2 million tranche in February, Bangladesh took several steps to reform the structure of its financial sector and its policies, including reducing subsidies by raising the price of power and gas, and fuel. The foreign exchange crisis in Bangladesh eased after the global lender released the first installment of a $4.7 billion loan. After then, World Bank and Japan International Cooperative Agency The IMF approved about $3.3 billion for Bangladesh under the Extended Credit Facility ECF) and the Extended Fund Facility (EFF) and about $1.4 billion under the Resilience and Sustainability Facility. Read more: BB set to announce new monetary policy

Bangladesh Bank spokesperson Md. Serajul Islam on Tuesday blamed the extreme volatility in the forex market in recent months on the global strength of the dollar against almost all currencies.  “Not only in Bangladesh but also in neighboring countries, the price of the US dollar has increased. In many South Asian countries, it is higher than it is in Bangladesh,” he said. Serajul Islam, also executive director of the BB, said this in a briefing for a group of reporters on decreasing remittances and export earnings in the last month. The inward remittance flow in September may have fallen due to the situation over the exchange rate, with a significant volume being diverted to the kerb market in search of a higher rate for the dollar, he believed. Year on year, Bangladesh's inward remittances dropped by 10.84 percent to $1.54 billion in September, the third month of the 2022-2023 fiscal, from $1.72 billion in the same month last year.  It was the lowest inflow of remittances in 7 months.  The drop was even steeper, almost 25 percent, in comparison to the previous month (August 2022). It followed a decision by banks on September 11 to pay a maximum of Tk 108 for each dollar to foreign exchange houses (like MoneyGram and Western Union, through which most expats send money). Prior to that, they had offered exchange houses up to Tk 115 for a dollar.  The Association of Bankers, Bangladesh (ABB) and Bangladesh Foreign Exchange Dealer’s Association (BAFEDA) were tasked to come up with the rate by the central bank, as an alternative to Bangladesh Bank frequently intervening in the market to set the rate, usually by selling dollars to support an artificially overvalued rate for taka. Read: Sept saw 25% drop in remittance, bankers blame fixed exchange rate But the “strongest dollar in a generation”, witnessed over the last year or so and likely to persist well into the foreseeable future, was starting to make the prevailing system very expensive to maintain for Shapla Chattor. The new system, meanwhile, would seem to be still going through 'teething problems.'  Serajul Islam however said today that the price of the US dollar "is normalizing with the initiative of the central bank".  "Bangladesh Bank should not provide any dollar support to the market.  BAFEDA and ABB are also playing a role in overcoming the dollar crisis. Currently, the volatility of the dollar has also decreased somewhat," he said. The spokesperson said Bangladesh has to emphasize this issue by increasing export income. “To that end, businessmen have to work to establish Bangladesh as a brand in the global market. If we can do this, this crisis will end quickly,” he added.

Bangladesh Bank (BB) suddenly changed the US dollar rate at the interbank exchange rate on Tuesday. The central bank says that the selling price of the dollar in interbank transactions on Tuesday was Tk106.15. And in the interbank transaction, the purchase price of the dollar is Tk101.67. But it is not the central bank rate, it is the dollar trading rate between the banks themselves. The price at which banks trade dollars is called the interbank rate. Read: Uniform rate: Tk 108/dollar max for remittance, Tk 99/dollar for export income from tomorrow Recently, the price at which the central bank used to buy and sell dollars was referred to as the interbank rate. The BB has been publishing that price on the website. But today (Tuesday) the central bank suddenly changed the price. Last Sunday, the selling price of the dollar was shown at Tk95 on the website. Yesterday (Monday), the price of the dollar was increased by Tk1 to Tk 96. Today (Tuesday) the selling price of the dollar is shown on BB’s website as more than Tk106. And the purchase price is showing around Tk102. However, even today, the BB has sold $4.5 crore from forex reserves at the rate of Tk96. Read: Illegal dollar trade: BB summons account details of 28 exchanges The central bank officials say that the price at which banks will buy and sell dollars will be the interbank rate. That will be published on the website. But the central bank will not sell at this rate. The BB Executive Director and Spokesperson Md Sirajul Islam told UNB, "The price of the dollar was increased to Tk 96 yesterday. Even today the central bank sold dollars at this price.” He is not aware why the price of dollars is being shown so high on the website.

Bangladesh Bank on Thursday withdrew the fixed exchange rate of US dollar for banks allowing the market to decide the rate based on demand and supply. The central bank on Thursday backtracked on its earlier decision after the remittance from expatriates marked a fall and exporters failed to convert their bills since the bank set a single exchange rate of a dollar at Tk89 on Sunday. Also read: BB to set uniform exchange rate to stabilize volatile dollar The BB informed banks the latest decision by giving some regulatory instructions. As a result, banks can set their (banks) own dollar price in line with the market demand. The BB directive said that expatriate income (remittance) and import bill will be exchanged at a competitive market price of dollars. Besides, export income will be encashed at market price of dollar. Banks will sell dollars at a slightly higher price than they buy it. Md Serajul Islam, executive director and spokesperson of BB told UNB that the central bank allowed banks to fix dollar pricing in consequence of market demand from Thursday. Also read:BB depreciates taka by Tk 0.40 against US dollars Explaining why the decision was made, he said, "Banks have said that those who are sending remittances do not think the dollar rate is right. Therefore, banks will set the dollar rate depending on the competitive market.” But the BB instructed banks they cannot make any abrupt raise in dollar price,” Serajul said. At the same time banks were instructed to keep watch on the money exchange houses so that they cannot raise dollar prices at unusual levels.

Bangladesh Bank (BB) has decided to set a uniform exchange rate of US dollar with taka for all banks to follow to tame the volatile forex market. The central bank asked the banks and foreign exchange dealers to recommend a uniform rate by Sunday on which it can take a decision. This emerged from a tripartite meeting the central bank held on Thursday with the Association of Bankers, Bangladesh (ABB), an association of banks’ CEOs-MDs, and Bangladesh Foreign Exchange Dealers Association (BAFEDA). Also read: Dollar rate: BB governor to hold meeting with bank MDs Thursday The meeting also warned banks to stay away from any manipulation in destabilize the forex market amid a fall in the reserve. Md Serajul Islam, executive director and spokesperson of BB told reporters after the meeting it also discussed ways to increase remittance, curb unnecessary import and some other banking issues. The BB governor Fazle Kabir assured liquidity support and dollar supply to the banks to meet the dollar demand and bring back stability in the market. Also read: BB depreciates taka by Tk 0.40 against US dollars Besides, the BB decided to stop selling export bills from a bank to any other bank. ABB Chairman and BRAC Bank Chief Executive Officer (CEO) Selim RF Hussain told UNB, several decisions have been taken in the meeting to ensure discipline and transparency in the foreign exchange market.

Bangladesh Bank (BB) Governor Fazle Kabir will have a meeting with the managing directors (MDs) of commercial banks on the volatile dollar. The meeting will be held Thursday, Sirajul Islam, spokesperson and executive director of the central bank, told UNB Wednesday. "The governor will hold a meeting with leaders of the Association of Bankers Bangladesh (ABB) Thursday to discuss the overall forex market situation." The meeting will look into why the banks are selling dollars at higher rates than the inter-bank exchange rates. Other issues in the banking sector can also be discussed, Sirajul said. Also read: BB depreciates taka by Tk 0.40 against US dollars