Dhaka, Feb. 7 -- Exchange rates, the price of one currency in terms another currency, are crucial in international finance for influencing trade balance, investment flows and inflation. Factors influencing exchange rates include interest rates, economic activity, inflation and market confidence. For economies like Bangladesh, exchange rate is an important economic variable. Changes in it affect economic activity, inflation and balance of payments.

An exchange rate regime is the framework a country's central bank or government employs to determine its currency's relative value in the international market. Foreign exchange regimes classify how countries manage their currency value relative to others, ranging from floating (market-driven) t...