Bangladesh will allow the market to determine the dollar exchange rate, Bangladesh Bank announced on Wednesday, marking a key policy shift aimed at securing stalled loan instalments from the International Monetary Fund (IMF).

“I hope the new rate will remain around the current level,” said central bank governor Ahsan H Mansur, speaking via video link from Dubai during a press briefing organised by the bank.

The decision follows prolonged negotiations with the IMF, which had urged the adoption of a market-based exchange rate as a key condition under a $4.7 billion loan programme agreed last year.

The IMF had withheld further loan disbursements due to concerns over Bangladesh’s tight exchange rate controls. On Tuesday, authorities agreed to liberalise the system, paving the way for the release of the programme’s fourth and fifth tranches.

Central bank officials confirmed the IMF has approved the disbursement of the pending tranches, which are expected to be received by June.

The policy shift aims to improve transparency, boost investor confidence, and help stabilise foreign exchange reserves, which have come under pressure in recent months.