Investor Presentaiton
Independent Review of
RBD
Bangladesh's Development
Prudent Exchange Rate Management:
Call of the Day
However, while Bangladesh did start to actively pursue a policy of
depreciation, after exhausting its tool of dollar injection, it proved to be too
late requiring the surgical operation of moving from managed float to free
float.
This, under the circumstances, is a step in the right direction. There will be
market correction in the USD-BDT exchange rate. However, as in 2012 there
is a possibility of (reverse) correction once the foreign exchange market
settles down.
In the short run, free float was likely to lead to deepening of imported
inflation.
ā However, it is to be noted that Bangladesh was not being able to enforce its
'managed float' anyway in case of L/C openings and settlements and inter-
Bank dollar market (as also for export settlements and remittance flows). So
the apprehension about 'imported inflation' could not be addressed in any
way through the 'managed float'.
CPD (2022): State of the Bangladesh Economy in FY2021-22 (Third Reading)
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