Market-based exchange rate to be introduced soon: minister

Finance Minister AHM Mustafa Kamal – photo taken by UNB from his verified Facebook page.

Finance Minister AHM Mustafa Kamal said the government is considering introducing market-based exchange rates.

“We are considering moving to market-based exchange rates. Today or tomorrow we will have to opt for a market-based currency exchange,’ he told reporters during a briefing on the results of two consecutive meetings of the Cabinet Committee on Economic Affairs and of the Cabinet Committee on Public Procurement on Wednesday.

The Finance Minister’s remarks came against the backdrop of the recent instability in the foreign exchange market where the US dollar exchange rate recently fell from Tk 85 to Tk 119.

Bangladesh Bank recently pegged the exchange rate at 95 TK while in private banks the dollar was trading at 108 TK.

Responding to a question on the repricing of bank lending rates, he ruled out the possibility of any upward or downward shift in lending rates from the current 6-9% interest rates on deposits and bank loans .

“Current interest rates between 6% and 9% are working well,” he said.

He said that many countries continue the path of raising interest rates to contain inflation.

“But it is very difficult in countries like Bangladesh to contain inflation by raising or lowering interest rates,” he said, adding that the central bank here does the job in two ways – by taking fiscal measures and monitoring the market.

About the foreign exchange reserve, he said that the foreign exchange reserve is in good condition.

“Our remittances are increasing while exports are increasing and imports are decreasing,” he said, saying there was no crisis in the foreign exchange market.

The foreign exchange reserve will soon rise to 48 billion dollars.

Responding to another question about the import of Russian fuel in rubles, the Minister of Finance said that work is underway in this regard.

“But in such a case, Bangladesh will have to do it through currency exchange. Russia must first accept our currency,” he said.