Preview

Exchange Rate Policy Bangladesh

Satisfactory Essays
Open Document
Open Document
13493 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Exchange Rate Policy Bangladesh
BIDS-PRP WORKING PAPER SERIES

Exchange Rate Policy under Floating Regime in Bangladesh
An Assessment and Strategic Policy Options

Working Paper No. 2

Monzur Hossain * Mansur Ahmed∗∗

October, 2009

* Research Fellow, Bangladesh Institute of Development Studies (BIDS)
∗∗

Research Associate, Bangladesh Institute of Development Studies (BIDS)

BIDS-PRP WORKING PAPER SERIES Working Paper No. 2

EXCHANGE RATE POLICY UNDER FLOATING REGIME IN BANGLADESH: AN ASSESSMENT AND STRATEGIC POLICY OPTIONS © BIDS-PRP, 2009

Published by

BIDS-PRP The Bangladesh Institute of Development Studies E-17, Agargaon, Sher-e-Bangla Nagar G.P.O. Box No. 3854, Dhaka-1207, Bangladesh Phone: 9112829, 9143441-8, FAX: 880-2-8113023 Website: www.prpbd-bd.org E-mail: prp.bids@gmail.com Series Editor Dr. K. A. S. Murshid

With support from

Manusher Jonno Foundation

Price:

Tk. 125.00

ii

Table of Contents

List of Abbreviations and Acronyms......................................................................................... Acknowledgment........................................................................................................................ Executive Summary................................................................................................................... I. Introduction.........................................................................................................................

iv v vi 1 3 5 8 10 13 15 18 23 26 28 29 32

II. Literature Review: Exchange Rate Policies of Bangladesh................................................ III. Exchange Rate Management in Bangladesh (2000-2008)................................................ IV. De facto Regime Classification for Bangladesh .…….………………............................ V. Exchange Market Pressure................................................................................................

VI. Exchange Rate


References: Table A2: Trade Weights used in the REER calculation Country China Singapore India USA UK EU Hong Kong Japan Data Source: Bangladesh Bank; Younus (2009)
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Intro to Business
    • 576 Words
    • 2 Pages

    Intro to Business

    At times when the currency value changes significantly investment is highly discouraged whether it’s low or extremely high and stable. However, if the foreign exchange rate is stable and low, investment is encouraged. There are three different types of Foreign Currency Exchanges rates, Floating Rates, Fixed Rates and Pegged Rates. Floating Rates are the main type of foreign exchange rate. This rate is why there are currency fluctuations in the foreign markets. This type of exchange rate is found in developed countries. Fixed Rates are rates in developing countries that are small in size. They use this type of exchange rate to stir up trade activity in the country as well as aid with foreign investments. Lastly, Pegged Rates are made up of the first two rates, floating and fixed. This type of exchange rate adjusts periodically, but only within a certain range. This type of rate is useful in countries who are trying to develop their economy.…

    • 576 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Giant Foods Case Analysis
    • 1675 Words
    • 7 Pages

    Giant Foods Case Analysis

    I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XIV. XV.…

    • 1675 Words
    • 7 Pages
    Good Essays
    Read More
  • Good Essays

    China’s Renminbi: “Our Currency, Your Problem”
    • 875 Words
    • 4 Pages

    China’s Renminbi: “Our Currency, Your Problem”

    When choosing an exchange rate regime, countries can operate between two primary exchange rate systems. The first is a fixed exchange rate where the currency is strongly fixed to another value or “pegged” within a particular band and the rate is adjusted from time to time to stay within the defined or pegged range. The second is a floating…

    • 875 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    The Bretton Woods Agreement and the Fixed System Vs. The Floating Exchange Rate Argument
    • 2068 Words
    • 9 Pages

    The Bretton Woods Agreement and the Fixed System Vs. The Floating Exchange Rate Argument

    References: Exchange rates: Fix or float, sink or swim? | The Economist. (1997). The Economist - World News, Politics, Economics, Business & Finance. Retrieved April 5, 2013, from http://www.economist.com/node/597868…

    • 2068 Words
    • 9 Pages
    Better Essays
    Read More
  • Powerful Essays

    Assessing Cross-Subsidy in Australia Post 2006鈥 7
    • 11897 Words
    • 48 Pages

    Assessing Cross-Subsidy in Australia Post 2006鈥 7

    iv v vi 1 2 2 3 3 4 4 5 6 7 9 9 11 12 16 17 17 21 22 23 24 25…

    • 11897 Words
    • 48 Pages
    Powerful Essays
    Read More
  • Better Essays

    Purchasing Power Parity
    • 2605 Words
    • 11 Pages

    Purchasing Power Parity

    There has been a long standing controversy among the economist about the validity of PPP (Purchasing Power Parity) in the long run. The parity reveals that prices in two different economies should be identical to each other when they expressed in terms of the same currency. It is a central building block in the monetary models of exchange rate determination. One of the most common practices, to test the validity of PPP is through unit root test of real exchange rate. In this paper unit root test has been done based on the data on Bangladesh and its major trading partner India, to see whether exchange rate has unit root or not. It has been found out that the PPP holds i.e. real exchange is not trend stationary in the long run, at a certain significance level. So the null hypothesis that real exchange root has unit root has been rejected. This paper should be seen as an exploratory study on this subject.…

    • 2605 Words
    • 11 Pages
    Better Essays
    Read More
  • Good Essays

    Relationship Between Inflation and Exchange Rate Essay Example
    • 1034 Words
    • 5 Pages

    Relationship Between Inflation and Exchange Rate Essay Example

    Exchange rates have a very important role in a country`s level of trade and it is critical to every free market economy worldwide. It can be high or low. Also we have three main divisions and they are: fixed, floating and managed exchange rate. Some of them influence the inflation directly. If we take the fact that inflation is the consequence of other factors, and if we continue exploring different scenarios of this kind of relationship, we can see how significant exchange rate changes can be as factors affecting inflation. It is well known that if we have devaluation (when the value of a fixed exchange rate is lowered) of the fixed exchange rate it may result as an increase in inflation. Also there is a case when we have revaluation (when the value of the exchange rate is raised) of the fixed exchange rate where it may act as a decrease in inflation. Also in floating exchange rate if the policymakers keep the level of the rate depreciated (when the value of the exchange rate falls) or appreciated (when the value of the exchange rate rises) for a longer time may lead to a sustained increase or decrease in inflation. Few questions in international economics have aroused more debate than the choice of exchange rate regime. Should a country fix the exchange…

    • 1034 Words
    • 5 Pages
    Good Essays
    Read More
  • Powerful Essays

    7 Habits of Highly Effective People
    • 2464 Words
    • 10 Pages

    7 Habits of Highly Effective People

    Bangladesh has suffered the stigma of a disaster -prone drought-ridden country for many years having a developing economy. Since then it has dropped steadily to about 2%. Export earnings have risen by 40 billion in the past three years to US $ 2.7 billion. In the past 20 years Bangladesh’s annual rate of GDP growth has been among the lowest in the region, averaging about 4%. It has the world’s highest population density. One of concern is Bangladesh’s low domestic savings rate. Last year it reached only 7.5% and investment rates have also been sluggish, averaging about 12% of GDP. The government plans to make the taka fully convertible on the capital account over the next year or two (1996, 1997). In recent years it has been stable, depreciating by only about 2%.…

    • 2464 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Exchange Rate System
    • 4398 Words
    • 18 Pages

    Exchange Rate System

    The objective of this paper is to investigate the exchange rate volatility and its effects on international Trade in Bangladesh during May 2003-Dec 2008. The concept of the study is taken from one off the working papers of Bangladesh Bureau of Statistics (BBS), Bangladesh Bank, Centre for Policy Dialogue (CPD) and leading English and Bengali Dailies in Bangladesh.…

    • 4398 Words
    • 18 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Hhk-Brick-Emission-Monitoring-Report-Final
    • 9087 Words
    • 37 Pages

    Hhk-Brick-Emission-Monitoring-Report-Final

    1. Background...............................................................................................1 2. Objectives of the study.............................................................................3 3. Selection of monitoring parameters .......................................................4 4. Scope of work............................................................................................4 5. Terms of reference (ToR) ........................................................................4 6. Activities undertaken...............................................................................5 7. Time schedule ...........................................................................................5 8. Description of the HHK...........................................................................5 8.1 9.1 9.2 Manufacturing Process ........................................................................6 Stack emission monitoring.................................................................11 Ambient air quality monitoring ........................................................13 9.2.1 9.2.2 9.3 10. 11. 11.1 11.2 11.3 11.4 12. 12.1 12.2 12.3 12.4 12.5 13. PM10 and PM2.5 .........................................................................13 Carbon monoxide .....................................................................15 9. Instrument and monitoring methodology............................................11…

    • 9087 Words
    • 37 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Regression
    • 15128 Words
    • 61 Pages

    Regression

    vii 1 1 3 3 7 7 15 15 25 25 29 29 30 31 33 33…

    • 15128 Words
    • 61 Pages
    Powerful Essays
    Read More
  • Better Essays

    Gfhgfj
    • 2704 Words
    • 11 Pages

    Gfhgfj

    Pay represents by far the most important and contentious element in the employment relationship, and is of equal interest to the employer, employee and government.In every sectors employees are paid for performing their duties and responsibilities.All the civil servants both in Bangladesh and Singapore are also paid though wages,salary,compansation.All employees are not paid at same rate.They are structured in various grades and scales.…

    • 2704 Words
    • 11 Pages
    Better Essays
    Read More
  • Powerful Essays

    Bangladesh Exchange Rate Assignment
    • 3001 Words
    • 10 Pages

    Bangladesh Exchange Rate Assignment

    In that time, the principal fact about official exchange-rate policy in Bangladesh has had to do with overseas workers’ remittances far exceeding any single sector of merchandise exports as a support for the balance of payments. A multiple exchange-rate system prevailed with a secondary market as an incentive for overseas workers to remit through official channels instead of at parallel or “hundi” market-rates, the spread between the parallel and official channels being exceptionally high for Bangladesh compared to India and Pakistan. IMF technical studies laid the groundwork for abolishment of the multiple exchange-rate practice and the unification of exchange-rates, which was accomplished on March 31 1992.…

    • 3001 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Foreign Exchange Market in Bangladesh
    • 5740 Words
    • 23 Pages

    Foreign Exchange Market in Bangladesh

    International trade is not an issue between the seller and buyer but also two or more country involves. The buyer and seller are not known each other’s so their needs several documents. These are;…

    • 5740 Words
    • 23 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Drugs in Bd
    • 5258 Words
    • 22 Pages

    Drugs in Bd

    We are submitting to you the assignment, due on 20 July 2011, that you requested. The assignment is entitled ‘An Assignment on Drug Abuse in Bangladesh’. The purpose of the assignment is to inform you of Drug Abuse, its harmful effects, treatment and prevention.…

    • 5258 Words
    • 22 Pages
    Powerful Essays
    Read More

Related Topics