Exchange rate policy of Bangladesh: Not floating does not mean sinking

The question of operating a primarily fixed or primarily floating exchange rate regime has long concerned academics and policy makers alike. This paper draws upon the literature on the subject and the experiences of some of the countries in the Asian and Pacific region that undertook major changes in their exchange rate regimes, from the perspective of the current policy choices facing Bangladesh. The paper concludes that Bangladesh’s experience with an adjustable basket peg policy has been broadly positive and moving to a floating rate regime is not called for.