Following months of impasse, the Bangladesh Bank is finally expected to put effect a more flexible exchange rate regime in order to meet requirements associated with a $4.7 billion loan program from the International Monetary Fund (IMF).
This expected to enable Bangladesh to receive $1.3 billion in the fourth and fifth tranches of the loan.
It is anticipated that the central bank will release a circular addressing this today.
In Bangladesh banks are using a crawling rate mechanism for spot US dollar purchases and sales. The mid-rate at Tk 119, with a 2.5% corridor per greenback.
According to Central bank officials said, Governor Ahsan H Mansur will hold a virtual press conference from Dubai on 14th May to announce the IMF loan release and exchange rate reform.
Conflicts over exchange rate policy and other economic changes have delayed the loan’s fourth installment.
From April 6-17th, an IMF committee traveled to Dhaka, but they were unable to reach an agreement.
During the IMF-World Bank spring meetings in Washington in late April, discussions went on but also came to a deadlock.
Following the virtual meetings on May 5 and 6, the Central bank eventually agreed to relax on the currency market.
The final $2.39 billion of a $4.7 billion total for Bangladesh is conditional on the country meeting key reform targets, specifically in revenue collection and financial sector governance.
In addition to the $2.31 billion already received in three installments.
