The International Monetary Fund has said that Bangladesh should adopt polices to create more flexible exchange rate regimes to build up its forex reserves.
聽鈥樷� think it鈥檚 important for Bangladesh to transition to a more flexible exchange rate regime. That will be important to build external resilience and build buffers and build reserves,鈥� said IMF director for Asia and Pacific Department Krishna Srinivasan at a press conference at Washington, D.C in the United States on Thursday.
鈥楽o I think that is the area where engagement and dialogue continues in terms of allowing the exchange rate to be more flexible so that reserves can be built up, so that, in a sense, will be a key priority for the country going forward,鈥� he said responding to a question from a journalist about the declining of Bangladesh foreign currency reserves.
He said that the exchange rate and reserve position has not improved as much in Bangladesh.
He also said that global commodity prices, supply chain disruptions and global uncertainties have threatened macroeconomic stability.
鈥楽o when you think in terms of the programme, this is a programme owned by the government, supported by the IMF,鈥� Srinivasan said, adding that Bangladesh has placed emphasis on issues like monetary tightening because inflation is rising high.
He said that Bangladesh has embarked on macroeconomic adjustment, which is aimed at stabilising the economy.
The gross foreign exchange reserves in Bangladesh, according to the IMF guidelines, dropped to $19.89 billion again on Wednesday.
An IMF mission will arrive in the capital next week to review targets, including the underachieved forex reserves, regarding its $4.7 billion loan programme.
The Finance Division officials said that they are looking forward to hold a successful negotiation with the visiting IMF mission to release the next tranche of around $690 million by next June despite missing the forex reserves target slightly.
Between April 24 and May 8, the IMF mission will hold a series of meeting with officials of the Bangladesh Bank, Finance Division and National Board of Revenue.
In January 2023, the IMF released the opening tranche worth $476 million after the government agreed to carry out economic reforms.
In December 2023, the international lender released $689 million as the second tranche of the loan.
