The revised gross forex reserves target for the current fiscal year ending on June 30 was $29.1 billion. It stood at $24.23 billion on June 5, according to the traditional calculation of the Bangladesh Bank. To meet the goal, another $4.87 billion will have to be added to the reserves by this month.

Owing to a chaotic and volatile exchange rate, local exporters were desperate for the introduction of a floating exchange rate so they could draw more money and be more competitive.

Bangladesh Bank today introduced the crawling peg exchange rate system and allowed banks to buy and sell US dollars freely at around Tk 117. 

The crawling peg system for the taka is a delayed and, perhaps, inadequate response to the bleeding of forex reserves. Some economists suggest the central bank should go beyond this formula and open the exchange rate to market forces to stop the continuous erosion of reserves. Either way, exporters and remitters will celebrate more flexibility in the exchange rate.

BB sits with ABB, BAFEDA

The peg system would be linked to a carefully selected basket of currencies and operate within a predefined exchange rate corridor

BB's adoption of crawling peg as per IMF prescription will possibly rule out a market-driven exchange rate, as suggested

Its a system of exchange rate adjustments in which a currency with a fixed exchange rate is allowed to fluctuate within a band of rates.