Exchange rates play an important role in the global economy by affecting international trade, investment, and financial flows. In the context of Bangladesh, the exchange rate of money (BDT) against foreign currencies is an important indicator of economic health and affects various stakeholders including businesses and individuals.
USD/BDT Exchange Rate as on Apr 20, 2024:
| Currency | Day’s Lowest | Day’s Highest |
|---|---|---|
| USD | 110.0000 | 110.0000 |
Cross Rates as on Apr 20, 2024
| Currency | Buying/Low Rate | Selling/High Rate |
|---|---|---|
| EUR | 117.3810 | 117.4250 |
| GBP | 136.9060 | 136.9500 |
| AUD | 70.7740 | 70.7960 |
| JPY | 0.7125 | 0.7125 |
| CAD | 79.8606 | 79.8838 |
| SEK | 10.0515 | 10.0594 |
| SGD | 80.8467 | 80.8586 |
| CNH | 15.1820 | 15.1862 |
| INR | 1.3146 | 1.3150 |
Exchange rate determination in Bangladesh
Exchange rates in Bangladesh are primarily determined through market forces, with dealer banks playing a key role in setting rates based on demand-supply dynamics. Additionally, Bangladesh Foreign Exchange Dealers Association (BAFEDA) provides indicative rates for guidance.
Introduction of Bangladesh Bank (BB)
Bangladesh Bank (BB), as the central bank, intervenes in the foreign exchange market to maintain market stability. It engages in USD transactions with dealer banks to ensure orderly market conditions and conducts USD purchases or sales with governments and international organizations.
Interbank exchange rate
Understanding the USD/BDT exchange rate
The interbank exchange rate represents the rate at which banks buy and sell foreign currencies among themselves. As of April 18, 2024, the USD/BDT interbank exchange rate ranged between 110.0000 (low) and 110.0000 (high) based on market conditions.
Factors Affecting Interbank Rate
Interbank rates fluctuate due to various factors including foreign exchange market demand, economic indicators and monetary policy.
Customer transaction rate
Exchange rates for customer transactions may differ slightly from interbank rates due to banks’ added margin. This variability can affect international transaction costs for businesses and individuals.
Exchange rates for international transactions
Cross rates with major foreign currencies such as Euro (EUR), British Pound (GBP), Australian Dollar (AUD), Japanese Yen (JPY), Canadian Dollar (CAD), Swedish Krona (SEK), Singapore Dollar (SGD), Chinese Yuan (CNH), and the Indian Rupee (INR) are important for international trade and investment.
Understanding the cross rate
Cross rates indicate the value of one currency relative to another currency, providing insight into international currency conversions beyond USD/BDT.
Affects exchange rate fluctuations
Exchange rates are influenced by factors such as export demand, imports, interest rates, inflation, political stability and market sentiment.
How exchange rates are determined
Exchange rates are primarily determined by market forces but can be influenced by central bank interventions to stabilize currency values.
Effect of exchange rate on the economy
Exchange rate fluctuations affect trade competitiveness, export earnings, import costs and inflation levels, which affect overall economic stability.
Introduction to BAFEDA
BAFEDA provides indexed exchange rates to facilitate foreign exchange transactions and market transparency.
Exchange rate forecast
Forecasting exchange rates helps businesses and investors reduce risk and make informed financial decisions.
Strategies for dealing with exchange rate risk
Businesses use hedging strategies and risk management tools to reduce the impact of exchange rate fluctuations on their operations and profitability.
Conclusion
In conclusion, exchange rates are important indicators of economic health and play an important role in shaping global trade and investment flows. Understanding how exchange rates are determined and their impact on various economic sectors is essential for businesses and policy makers.
