Bangladesh Bank to Let Market Forces Decide Dollar Exchange Rate

Bangladesh Bank (BB) will not intervene in the dollar exchange rate in the near future, allowing market supply and demand to determine currency values.

The central bank governor delivered this message to the treasury heads of commercial banks during a meeting on Tuesday (May 19). According to a senior BB official in attendance, the governor sought to understand current foreign exchange dynamics and listened to the bankers' operational concerns.

The governor clarified that the central bank will no longer dictate the foreign exchange market, officially transitioning toward a more flexible, market-based regime. However, he strongly warned banks against attempting to manipulate dollar rates to artificially inflate prices.

Despite this official stance on a free-floating currency, a deputy managing director of a private commercial bank noted past discrepancies. The official alleged that the central bank had informally intervened between March and April of this year by verbally dictating a ceiling for dollar exchange rates.