Historical Sketch

In the mid18th century, the English East India Company conquered Bengal and established its first colony with Calcutta (Kolkata) as a centre. The British administration took over in 1858, and Bengal became part of British India. In the 20th century, the Indian independence movement grew stronger, and after World War II, Great Britain began to move out. In 1947, a partition of British India was implemented, creating India and Pakistan as independent states based on a split between the two dominant religions, Hinduism and Islam. Bengal itself was partitioned on top with West Bengal joining India and East Bengal joining Pakistan. In the 1960s, Bengal nationalism increased and led to the unilateral declaration of independence of East Pakistan as Bangladesh. The following war ended with the Pakistani defeat of December 1971. The conflict was terminated when Pakistan recognized independent Bangladesh in 1974.

Monetary History Overview

Immediately after the victory in the war of liberation, the provisional government initiated the creation of a national currency. In December 1971, the central bank was constituted and the Bangladeshi Taka was created as the new national currency. The note issuance and withdrawal of the Pakistani Rupee began in March 1972 and lasted until June, the production of coins took another 18 months. The Taka was exchanged on par and without any confiscation. However, the Taka was devalued by 36% on the first day and by another 43% in 1975. In April 1976, the exchange rate of Taka was floated and has been subject to a steady decline in value since then which has eroded more than 90% until today.

Bangladesh joined the International Monetary Fund (IMF) on 17.08.1972.

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