B Mirror Report :  Bangladesh Bank has warned all scheduled banks against engaging in any form of manipulation in the foreign exchange market as the central bank moves toward a more market-driven exchange rate system.

The warning came during a meeting held at the central bank headquarters in Dhaka on Tuesday, chaired by Bangladesh Bank Governor Md Mostaqur Rahman and attended by treasury heads of commercial banks.

According to meeting sources, the governor assured bankers that the central bank would not interfere unnecessarily in the foreign exchange market but made it clear that any attempt to manipulate forex transactions would not be tolerated.

He also called on treasury officials to cooperate in strengthening interbank foreign exchange transactions to ensure a more active and efficient market.

“We want to see a vibrant interbank foreign exchange market,” the governor told the meeting, according to a senior treasury official who attended the discussion.

During the first phase of the meeting, the governor held discussions with treasury heads to better understand current market dynamics and sought their views on making Bangladesh’s forex market more flexible and globally acceptable.

In the second phase, senior officials of Bangladesh Bank joined the discussions.

Central bank officials also instructed banks to maintain their exchange positions properly in order to minimise discrepancies between NOSTRO accounts and local books.

A NOSTRO account refers to a foreign currency account maintained by a local bank with an overseas bank.

Bangladesh Bank officials further informed the meeting that the central bank would continue monitoring banks’ forex activities through regular inspections.