DHAKA, May 14 (Xinhua) -- The central bank of Bangladesh has announced to create a 500-million U.S. dollars fund to rein in the forex market.
Bangladesh Bank Governor Ahsan H. Mansur made the announcement Wednesday, saying "we'll intervene in the foreign exchange market to keep the rate stable in case of large foreign payments."
The announcement comes after the central bank of Bangladesh signals to adopt the market-based floating exchange rate of the U.S. dollar against the Bangladeshi taka soon.
The governor expressed hope that the exchange rate will remain close to the current level following the transition to the new system, supported by sufficient dollar liquidity from robust inflows from exports and remittances.
Currently, Bangladeshi banks are following a crawling peg rate system for spot purchases and sales of U.S. dollars, where the mid-rate for a U.S. dollar is set at 119 taka with a 2.5 percent corridor per dollar.
The latest measure reportedly follows one of the key IMF conditions tied to its 4.7 billion dollars loan to Bangladesh, which will enable the country to receive 1.3 billion dollars in the fourth and fifth tranches. ■
