DHAKA, June 2, 2022 (BSS) - Bangladesh Bank (BB) has allowed floating exchange rate for the US dollar.

This means the price of the dollar in the market will be determined by demand and supply and banks will be allowed to set their own dollar prices.

The central bank has already instructed banks in this regard and asked banks to keep their eyes so that the dollar price will not increase sharply.

Talking to BSS, Chief Spokesperson and BB Executive Director Md Serajul Islam said the central bank took the decision as inflow of inward remittances had declined in the last couple of days.

"The price of the dollar will be set by the open market. Bankers have said that, without this step, remittances will fall," he added. 

Despite allowing the currency to float, BB will still monitor the price, Islam said.

The BB communicated the decision to banks verbally. The move has already come into effect.