Dhaka, Bangladesh (BBN) - Bangladesh Taka (BDT) is set to depreciate further against the US dollar as the range of band of the crawling peg has been decided to rise.
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.
The decision was taken at a meeting between Chief Adviser Professor Muhammad Yunus and Bangladesh Bank (BB) Governor Ahsan H Mansur on Sunday.
However, inter-bank exchange rate of the BDT against the American greenback may reach at maximum BDT 119.92 per US dollar instead of BDT 118.00 each US dollar following the decision.
“Such decision may help implementation a market based exchange rate system in Bangladesh,” a senior treasury official told BBN in Dhaka.
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 BB 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