The advantages and disadvantages of the floating regime in Bangladesh is discussed here

1. Government Influence on Exchange Rate in
Bangladesh: Problems and Deficiencies of
Managed Floating Regime
Noshin Tasneem (B1304005)
Tania Islam (B1304051)
Tazkeer Azeez Chaudhuri (B1304061)
Salsabil Rahman (B1304115)
Hossain Mohammed Omar Khayum (B1304055)

2. The exchange rate
expresses
the national
currency's
quotation in
respect
to foreign ones
tremendous
attention from
policy makers
after Bangladesh
has taken on the
floating exchange
rate
The changing of
exchange rate
brought many
arguments
Bangladesh Bank
intervenes to
control exchange
rate
Introduction

3. qualitative one with
descriptive analysis
secondary sources
Characterize the exchange rate
policies
Evaluate the appropriateness
of such policies
Show what the problems
are within
Suggest probable way out
Problem
Statement
Methodology
Benefits
Objectives

4. adjustable pegged system
Exchange Rate History
1876 1944 1971
Gold Standard
Bretton Woods Agreement
and Adjustable Peg System
The Smithsonian
Agreement and Fixed
and Floating Exchange
Rate

5. the exchange rate system was dependent on the respective currency’s comparative
convertibility to an ounce of gold
Gold
StandardInflation low
Long Term Planning
unstable liquidity
position
can lead to imbalances
contract the money
supply

6. Bretton Woods Agreement and Peg SystemBretton Woods Agreement and Peg System
Bretton Woods Agreement and Peg System
International Monetary fund
World Bank Group
country’s export and import
raises standard of living
overvaluation of the currency
Large amount of reserve has
to be maintained

7. Pros And Cons
The Smithsonian Agreement
market forces of supply and
demand began to determine the
exchange rate
allowed greater liquidity and
central bank control
that it can be subject to
attacks by speculators or
sudden panic-driven
moves

8. adjustable pegged system
Bangladesh Exchange Rate
History
1972 1980 1983 2000 2003 2009
pegged to the British
pound sterling
pegged to a basket of major
trading partners' currencies
with pound sterling as the
intervening currency
pegged to a basket of
major trading partners'
currencies with US dollar
as the intervening
currency
adjustable pegged
system
floating exchange rate
Govt. active
intervention

9. Avoid Inflation
Interest rate
stable wages and prices
economic growth in the long run
These are the reasons
why Bangladesh has kept
fixed exchange rate for a
long time
Fixed Exchange Rate Bangladesh

10. Hurting Exports
Greater Earning Avoided
Requires Adjustments
Fixed Exchange Rate Bangladesh
Bangladesh needs to be a
very strong economy for
overcoming these obstacles

11. Pros And Cons
Floating Exchange Rate
increase exports
economic growth in the
short run
Weak currency can lead to
higher earnings from exports
Inflation
excess volatility in the
exchange market
international reserves

12. Thinking The Other Way
Round
economic benefits of an undervalued
currency
achieve a higher export-led growth rate
more jobs for Bangladeshi workers
support Bangladesh’s market oriented
development strategy
Managed Peg
Regime

13. Reasons to Move Towards Managed Peg
System
To increase flexibility
To trade with different currency easily
cheaper import cost or higher export growth
rapid economic growth

14. Probable Shortcomings
The valuation of
the multiple
currencies,
continuous
monitoring, etc.
will require
extra budget,
effort
The
measurements
are very
sensitive,
weightage of
the currencies is
to be measured
very carefully.
currency
manipulation
will raise
international
controversy
affecting the
international
trade
The lag time of
the adjustments
and policy
implementation
will become
risky for the
economy

15. RECOMMENDATIONS
Crisis management
Accumulation
of Reserves
Proper Security of
the Reserves
Institutional Development