Bangladesh Bank Governor Ahsan H. Mansur has announced the immediate implementation of a managed floating exchange rate, helping secure the loan confirmation.
The International Monetary Fund (IMF) is set to release USD 1.3 billion to Bangladesh. This comes after the completion of a fourth review of its $4.7-billion loan programme and a key breakthrough in talks on exchange rate reforms, Bangladesh’s finance ministry said.
“After carefully reviewing all the issues … both parties have agreed on the revenue management, currency exchange rate and other reform frameworks,” the finance ministry said in a statement on Wednesday.
Ahsan H. Mansur, Bangladesh’s Bank Governor, announced the implementation of floating rate
Bangladesh Bank Governor Ahsan H. Mansur has announced the immediate implementation of a managed floating exchange rate, helping secure the loan confirmation.
Speaking at a virtual press conference from Dubai, Mansur stated that Bangladesh is expected to receive a total of USD 3.5 billion by June from various multilateral donors, including the World Bank, Asian Development Bank (ADB), and the IMF.
“Bangladesh will receive a total of USD 3.5 billion by June from different multi-donor agencies, including the WB (World Bank), ADB (Asian Development Bank) and IMF,” he said in a virtual press conference from Dubai.
According to central bank officials, the IMF has agreed to release the stalled fourth and fifth tranches of its loan, totalling USD 1.3 billion, by June, following the resolution of a prolonged disagreement over exchange rate flexibility.
The announcement marks a significant policy shift, with Bangladesh moving away from its partially flexible system. Under the new approach, the exchange rate will operate within a designated band, although specific details were not disclosed. To support this transition, a USD 500 million stabilisation fund has been set up to help manage volatility.
Mansur noted that banks have already been notified to adopt market-based exchange rates. However, he emphasised that the central bank would still intervene in cases involving large foreign transactions to maintain stability.
