Market-based forex rate may be introduced soon: Finance minister

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

"We are contemplating going for market-based foreign exchange rates. Today or tomorrow, we will have to go for market-based trading of foreign currency," he told reporters after the meetings of the Cabinet Committee on Economic Affairs and the Cabinet Committee on Government Purchase on Wednesday.

The finance minister's remarks came against the backdrop of the recent instability in the foreign currency market where the US dollar's exchange rate recently went up to Tk119 from Tk85.

The Bangladesh Bank recently fixed exchange rate at Tk95 while in private banks dollar was being traded at Tk108.

Responding to a question on re-fixing the bank lending rates, he dismissed the possibility of any upward or downward change in lending rates against the existing rates of 6-9% interest on deposits and bank loans.

"The current interest rates between 6% and 9% are working well," he said.

He said many countries pursue the path of increasing interest rates to contain inflation.

"But it is very tough in countries like Bangladesh to contain inflation by increasing or decreasing the interest rate," he said, adding, the central bank here does the job in two ways – by taking fiscal measures and monitoring the market.

About foreign exchange reserve, the finance minister said the country's reserve is in a good state.

"Our remittance is increasing while export is rising and import is decreasing," he said, claiming that there is no crisis in the foreign currency market. The foreign exchange reserve will again go up to $48 billion soon, he said.

Responding to another question on import of Russian fuel in roubles, the finance minister said work is in progress in this regard.

"But in such a case, Bangladesh will have to do it through currency swap. Russia has to accept our currency first," he said.