The Bangladesh Bank (BB) has formally warned the treasury heads of all scheduled commercial banks against engaging in speculative or manipulative foreign exchange transactions. The administrative warning was delivered during a high-level regulatory meeting convened at the central bank’s headquarters in Dhaka. The session, chaired by the Central Bank Governor, Md Mostaqur Rahman, addressed market regularisation, compliance metrics, and the stabilization of interbank transactions.
Policy Stance and Market Deregulation
During the proceedings, Governor Md Mostaqur Rahman clarified the central bank’s official regulatory stance regarding currency market operations. He assured the assembled treasury executives that the central bank would refrain from arbitrary structural interventions in the market, but emphasized that any speculative or manipulative activities would face stringent regulatory action.
The Governor requested full cooperation from the treasury heads to improve liquidity and generate greater momentum within the interbank foreign exchange market. According to senior treasury officials present at the session, the Governor explicitly stated that the administration desired a vibrant, transparent, and active interbank foreign exchange market.
The strategic discussions regarding the operational frameworks of the country’s foreign exchange (forex) market were executed in two distinct, sequential phases:
Phase I: Governor Rahman held an exclusive brief with senior treasury officials to analyze current market patterns. He sought their direct observations and technical opinions on how to transition the domestic forex environment into a genuinely free-floating and internationally credible system.
Phase II: The discussion was expanded to include relevant technical directors and high-ranking central bank officials, who collaborated with the commercial bank treasury heads to formalise operational compliance baselines.
Reconciliation of NOSTRO Accounts and Auditing
A major technical requirement raised by the central bank leadership was the mandatory and precise reconciliation of foreign exchange positions. Treasury heads were specifically instructed to manage their exchange positions accurately to eliminate discrepancies between overseas records and domestic account ledgers.
Commercial treasuries must tightly close the gap between their NOSTRO accounts—the foreign currency accounts that a local bank maintains with an overseas financial institution—and their local accounting books. To ensure strict compliance with these operational standards, the central bank informed the treasury executives that it would deploy continuous oversight mechanisms, supported by unannounced, regular on-site inspections of commercial banking records.
Summary of Central Bank Consultations and Directives
The operational decisions, structural terminology, and regulatory mandates established during the central bank session are summarized in the table below:
| Regulatory Parameter | Operational Definition & Statutory Directive |
| Chairing Authority | Governor Md Mostaqur Rahman, Bangladesh Bank (BB) |
| Primary Target Audience | Treasury Heads of all scheduled commercial banks in Bangladesh |
| Core Regulatory Objective | Prevention of forex manipulation; establishment of a free-floating market |
| NOSTRO Account Mandate | Local banks must precisely match positions held in foreign currency accounts overseas with local books to minimise gaps. |
| Enforcement Mechanism | Continuous automated monitoring paired with mandatory periodic field inspections. |
| Interbank Goal | Elimination of artificial price distortion to foster a globally acceptable interbank market. |
The central bank confirmed that the data collected from the treasury heads during the initial phase of the meeting will be utilized to formulate future exchange rate policies, ensuring that the country’s financial sector aligns with international trading standards.