Bangladesh Bank (BB) has implemented the Crawling Peg Mid-Rate (CPMR) system, allowing banks to freely buy and sell US dollars at around Taka 117. The decision was made during a meeting of the Monetary Policy Committee (MPC) at BB's headquarters in the city.

Former Bangladesh Bank Governor Dr. Atiur Rahman described the decision as practical, suggesting that it could help align the exchange rate with market-based rates. The meeting, chaired by BB Governor Abdur Rouf Talukder, was attended by BB Deputy Governors Dr. Md. Habibur Rahman and Kazi Sayedur Rahman, Economist Dr. Sadiq Ahmed, Director General (DG) of Bangladesh Institute of Development Studies (BIDS) Dr. Binayak Sen, and Executive Director of BB Dr. Md. Ezazul Islam.

The introduction of the crawling peg system aims to bring more flexibility to the foreign exchange market, with CPMR set at Taka 117.00 per USD. This system will be reviewed periodically, with adjustments made as necessary, before transitioning to a fully flexible market-based system in the future.

The crawling peg system allows for currency fluctuations within a predetermined band of rates, combining aspects of fixed and floating exchange rate regimes. It is often used to manage currency movements in the face of threats such as inflation or economic instability, according to the International Monetary Fund (IMF).

Dr. Atiur Rahman highlighted the prudence of both the crawling peg mid-rate and the decision to raise the policy rate. He emphasized the need for coordination between monetary and fiscal policies to stabilize the economy, noting that the decision may mitigate speculation in the foreign exchange market and address inflation concerns.

Additionally, the committee decided to discontinue the SMART lending rate mechanism, allowing banks to determine lending rates based on demand and supply dynamics, as per a circular issued after the meeting.