Bangladesh needs to pursue a more flexible exchange rate regime to help build up forex reserve and cut inflation, the International Monetary Fund (IMF) said Thursday.
Krishna Srinivasan, IMF director for Asia and Pacific Department, made the suggestion at a press briefing on Regional Economic Outlook on the day.
He said Bangladesh embarked on macroeconomic adjustment aimed at stabilising economy.
He said it was true that the forex reserve position was yet to go up due to last general election which affected part of the international assistance.
"Also, this is more important for Bangladesh to go for a more flexible exchange rate regime for building resilience of forex reserve," he said, replying to a question from the FE.
That was the area where engagement and dialogue continued between the IMF and Bangladesh, he said.
Srinivasan said Bangladesh needed to further tighten monetary policy to build up forex reserve that could help ease inflation.
"Inflation has worst impacts on poor," he said adding Bangladesh needed to bring inflation on track.
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