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BD currency devaluation seen at 8-10 pct

DHAKA: Bangladesh's taka currency is expected to be devalued by 8.0 to 10 percent against the U.S. dollar in 1996, Peregrine Capital Limited said on Monday.

"The Bangladesh Bank (central bank) ... will not allow the taka to go into freefall, and therefore the 8-10 percent devaluation we forecast for 1996 should be a gradual one," the Hong Kong-based Peregrine said.

The report said the taka had been extremely steady.

The taka has devalued by an average of 1.3 percent annually since 1993. The central bank has been under pressure from donor nations to remove its indicative rate, the report said.

The central bank last readjusted the taka downward against the dollar by 1.3 percent to 41.40/41.60 on April 8. Commercial banks quote the taka within the central bank band in the foreign exchange market.

However it said the central bank was unwilling to remove the indicative rate because of rising inflation, which was more than 6.0 percent in the 12 months to April 1995.-Reuter