Bangladesh is set to introduce a crawling peg system next month to enhance exchange rate flexibility and bolster foreign currency reserves, aligning with IMF recommendations. The crawling peg system allows a currency’s fixed exchange rate to fluctuate within a predetermined range, aiding in managing currency swings and potential devaluation threats.
Bangladesh Bank has notified the IMF about the upcoming implementation of this system for the taka. This move follows Bangladesh’s entry into an IMF loan program last year. An IMF mission is currently in Dhaka to assess the country’s economic health and compliance with loan conditions. The crawling peg system aims to address concerns about the financial account while the current account adjusts well.
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