The interest rate and foreign currency exchange rate will stabilise at a certain point in time after fluctuating due to market dynamics, said Md Nazrul Islam Mazumder, chairman of the Bangladesh Association of Banks (BAB), yesterday.

"No one has the power to control the interest rate and exchange rate as these depend on demand and supply in the market. And there is no instance of fixing these rates in the world," he said.

"So, it needs to function freely. I welcome the Bangladesh Bank's decision to let it go free," he said.

The economy will run at its own pace and the foreign exchange rate and interest rate will hover at a certain range following the kerb market, he said. "Finally, the rates will become stable at a certain point in time," he said.

Mazumder, also the chairman of Exim Bank, was speaking to journalist after holding a meeting at the central bank, chaired by Bangladesh Bank Deputy Governor Nurun Nahar and attended by top central bank officials.

The price of the US dollar surged by nearly Tk 7 to Tk 125 in the kerb market on Thursday, just a day after the Bangladesh Bank announced the adoption of the crawling peg, a flexible exchange rate system.

The price of each US dollar has been hovering between Tk 120.30 to Tk 121 in the kerb market over the past couple of days, according market insiders.

Sharing the outcomes of the meeting with the central bank officials, Mazumder said they discussed the establishment of a hospital under the initiative of Bangladesh Bank.

He said there was a huge crisis of beds for patients during the Covid-19 pandemic. This is why the initiative has been taken to establish a hospital in Dhaka, Mazumder said.

All state-owned, private and foreign banks operating in the country will cooperate with the initiative, he added.