General Economics Division member Monzur Hossain on Wednesday said that they did not support a more flexible exchange rate policy as suggested by the International Monetary Fund under its current $4.7 billion loan programme.
Determining the rate as per the market is not supportable, said the GED member while releasing the 鈥楳onthly Economic Update and Outlook鈥� at a briefing at the Planning Commission in the capital鈥檚 Agargaon area.
The exchange rate has recently remained relatively stable after volatility due to positive external sector performance and the foreign exchange reserves have increased, according to the update claimed to be first such kind by the GED.
The exchange rate of Bangladeshi taka against major currencies steadied, giving a positive outlook for stabilisation of the external sector, said the update.
鈥極pening up the exchange rate to the market will cause volatility,鈥� said the GED member.
The country鈥檚 financial market has not improved, he said, adding that many banks were weak.
Finance adviser Salehuddin Ahmed has already said that they would not listen to the IMF advice regarding the exchange rate to avert any such foreign exchange market volatility faced by Pakistan and Sri Lanka.
Bangladesh has been running the IMF programme since 2023 to avail $4.7 billion loan by June 2026.
So far, $2.3 billion has been disbursed in three tranches under the loan with the last one in June 2024.
The interim government that assumed power on August 8, 2024, could not get the IMF agreed to disburse the fourth tranche scheduled to be disbursed in February.
It expects the disbursement of fourth and fifth tranches jointly in next June, but is yet to reach any agreement with the IMF in this regard.
The GED update also said that a stable exchange rate and declining inflationary pressures would lead to economic recovery on the back of positive exports and remittance growth.
Moreover, an accommodative but relatively tighter monetary policy stance improved investors鈥� confidence, it said.
Commercial lending interest rates need to be reduced to boost investments by improving the non-performing loan situation and operational efficiencies of the banks, the update said.
The government鈥檚 commitment to fiscal consolidation will contribute to improved fiscal accounts. Improvement of efficiencies in selecting development projects targeting sustainability and efficiency will enhance the possibility of quality growth.
For agriculture, the outlook for boro production is promising, considering that better weather will prevail.
Inflation is expected to remain stable within the range of 8 per cent to 9 per cent in April and May, according to the GED update.
