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BB to float exchange, lending rates by June: Rouf

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Bangladesh Bank is expected to go for floating exchange and lending rates by June next as part of an effort to reform its financial sector.

"Now we're working on introducing the market-based foreign-exchange and lending rates for a better outcome," BB Governor Abdur Rouf Talukder said on Tuesday.

The foreign-exchange rates are administered to some extent by the central bank while the lending rates are capped.

The governor was speaking as the chief guest at a discussion in Dhaka on "Middle-income trap and way forward", marking the occasion of Bangladesh-ADB 50 years of partnership.

"To avoid the Middle-income trap, Bangladesh needs to go for some reforms and take initiatives," he said, stressing the need for investing in product diversification, productivity improvement, developing CMSMEs, climate change issues, and improvement in financial inclusion and digital transformation.

Mr Talukder also revealed that the central bank is working to increase cashless transactions in Bangladesh to nearly 75 per cent within the next four years, aiming to reduce dependence on hard currency.

"We're also working on keeping the inflation under control through managing the aggregate demand and improving supply-side efficiency," he said, adding that the central bank was also applying different monetary tools in this regard.

Earlier, the International Monetary Fund (IMF) has imposed some conditions of financial sector reform against its budget support of US$4.7 billion to Bangladesh. It has already disbursed $476.27 million of the credit's first trance in February last.

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