Dhaka, Bangladesh (BBN) - Bangladesh Taka (BDT) depreciated significantly against the US dollar following enhancement of the band of the crawling peg.
The local currency lost its value by BDT 2.0 in last two days for the sale of bills for collection, generally known as BC selling, in the country’s foreign exchange (forex) market, bankers said.
The US currency was quoted for BC selling at maximum BDT 120.00 each dollar on Tuesday against BDT 119.80 on the previous working day. It was BDT 118 on Sunday.
According to the central bank latest report, the American greenback was also quoted at maximum BDT 120.00 on Monday in the inter-bank market. The day’s lowest rate was BDT 119.70 each dollar.
To increase the flow of foreign exchange, a decision has been taken to increase the band of the crawling peg, which allows fluctuations of the exchange rate within a predefined range, to 2.5 per cent instead of 1.0 per cent.
Earlier on Sunday, the government as well as the Bangladesh Bank (BB) decided to increase the band of the crawling peg, which allows fluctuations of the exchange rate within a predefined range, to 2.5 per cent instead of 1.0 per cent aiming to increase the flow of foreign exchange in the market.
The revision in the band of crawling peg comes more than three months after the BB introduced the crawling peg moving away from administered rates of US dollar in its bid to gradually allow demand and supply to determine the exchange rate.
The central bank of Bangladesh introduced a crawling peg mid-rate of BDT117 in May this year by allowing an over 6.3 percent deprecation of the taka, which has significantly lost value in the last two and a half years amid falling foreign exchange reserves.
BBN/SSR/AD