Market-based interest-exchange rate process continues

The process of making the interest rate and exchange rate market based is going on, said Finance Minister AHM Mustafa Kamal in his budget speech on Thursday.

The finance minister unveiled the proposed budget of Tk 761,785 crore for fiscal year 2023-24 after getting approval from the cabinet. 

Now the bank’s highest lending rate is 9 per cent which took effect in April of 2020.

Economists criticised the single-digit lending rate because inflation in the country is higher than the lending rate. On the other hand, the current multiple exchange rates help make the foreign exchange market volatile, they said.

Now the US dollar rate for remittance earning is Tk 108.50 per dollar, the rate is Tk 107 per USD for export earnings and the rate is over Tk 110 per USD in informal channel.

In the budget speech, the finance minister said that Bangladesh Bank is contemplating to bring about fundamental changes in the monetary policy in order to make the monetary policy consistent with the changing global and domestic realities.

“To bring more transparency and flexibility in the monetary policy framework, consideration is being given to move towards the interest rate targeting in place of monetary targeting in monetary policy,” he added.