BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Wednesday, 24 July, 2002, 09:35 GMT 10:35 UK
IMF pushes Bangladesh to float currency
Ten taka
The central bank last cut the value of the taka in January
Bangladesh has accused the International Monetary Fund (IMF) of pressuring it to float its currency on the foreign exchange market.

Finance Minister M. Saifur Rahman told reporters on Tuesday that Bangladesh might allow its currency, the taka, to float freely in mid-November if the country's reserves reach more than $2bn.

"We cannot allow a free floating currency at the moment when the (foreign currency) reserves are low," Mr Rahman said.

Ministry officials later confirmed that Bangladesh was under pressure from the IMF to float its exchange rate.

In February, the IMF refused Bangladesh an emergency loan when reserves dipped below $1bn unless it cut public spending and closed down loss-making state-run industries.

Conditions 'not right'

Mr Rahman said the country's current foreign exchange reserves of about $1.6bn were too low to float the currency.

The rapid increase in reserves since February is due to the repatriation of funds by Bangladeshi's living overseas who are worried the US crackdown on terrorist funds could threaten their savings.

The reserves are equivalent to only two months of imports.

The country's central bank, Bangladesh Bank, currently sets a trading band for foreign currency transactions.

The central bank last adjusted the taka on 5 January this year, cutting its value against the US dollar by 1.55% to 57.40.

Bangladesh's economic growth has been falling, dropping by 0.7% to 5.2% last year, and its trade deficit and external debt have expanded in the last year.

 WATCH/LISTEN
 ON THIS STORY
Duncan Wrigley, Economist Intelligence Unit, London
"(Floatation) does seem likely as the current government is seen as very pro-business and pro-market."
See also:

29 Apr 02 | Business
17 Feb 02 | South Asia
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes