According to an article published by the Daily Star in August, 2021, "After buying a record amount of US dollars last year, Bangladesh Bank has begun selling the American greenback. The central bank purchased the dollar amounting to $205 million in July. But it has started selling the greenback from this month". The main purpose behind this action is to help protect the value of the BDT against the USD. Based on your knowledge of the foreign exchange market, explain what the BB is actually trying to do and how it may affect the current account balance of Bangladesh, holding everything else constant. Note: Greenback means USD.

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter29: International Finance
Section: Chapter Questions
Problem 4P
icon
Related questions
Question
According to an article published by the Daily Star in August, 2021, "After buying a record
amount of US dollars last year, Bangladesh Bank has begun selling the American
greenback. The central bank purchased the dollar amounting to $205 million in July. But it
has started selling the greenhack from this month". The main purpose behind this action is
to help protect the value of the BDT against the USD.
Based on your knowledge of the foreign exchange market, explain what the BB is actually
trying to do and how it may affect the current account balance of Bangladesh, holding
everything else constant.
Note: Greenback means USD.
Transcribed Image Text:According to an article published by the Daily Star in August, 2021, "After buying a record amount of US dollars last year, Bangladesh Bank has begun selling the American greenback. The central bank purchased the dollar amounting to $205 million in July. But it has started selling the greenhack from this month". The main purpose behind this action is to help protect the value of the BDT against the USD. Based on your knowledge of the foreign exchange market, explain what the BB is actually trying to do and how it may affect the current account balance of Bangladesh, holding everything else constant. Note: Greenback means USD.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Recommended textbooks for you
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Brief Principles of Macroeconomics (MindTap Cours…
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning