The Bangladeshi Taka (BDT) remained slightly undervalued for two consecutive months, according to a recent Bangladesh Bank (BB) study, suggesting that depreciation pressures on the currency are easing.

The report, released by BB’s Deputy Governor Dr. Md Habibur Rahman and colleagues, estimated the equilibrium exchange rate at Tk 121.55 in June 2025, indicating that the Taka was undervalued by Tk 1.71 against the US dollar.

By comparison, the currency had been overvalued in previous years: Tk 9.09 in June 2021, Tk 8.11 in 2022, and Tk 0.22 in 2023, before turning slightly undervalued by Tk 1.11 in June 2024.

The study highlighted that exchange rate imbalances can strain foreign reserves and heighten depreciation risks.

While the Taka faced sharp pressures in 2023, authorities’ policy measures in the latter half of 2024 helped ease depreciation, stabilising the currency and supporting reserve recovery.

Following the introduction of a fully market-based exchange rate system in May 2025, the report noted a significant reduction in misalignment with the Taka’s equilibrium level.

The central bank’s policies were credited with improving market confidence without distorting exchange rate mechanisms.