Bangladesh is gearing up to introduce a crawling peg system for its currency by next month, aiming to enhance exchange rate flexibility and bolster foreign currency reserves, aligning with IMF recommendations. The crawling peg system allows a currency’s fixed exchange rate to fluctuate within a certain range, helping to manage currency volatility and potential devaluation pressures.
The implementation of this system has been a key focus since November last year, with the IMF urging Bangladesh to adopt it as part of its economic reform agenda. The move comes within the framework of Bangladesh’s IMF loan program, which commenced in January last year, with a total of $4.7 billion allocated. An ongoing IMF mission in Dhaka is reviewing the country’s economic progress and loan conditions, potentially revising targets such as reserve requirements.
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