The taka is the official currency of Bangladesh. This decimalized currency is divisible into 100 subunits called poisha. The word taka also means money, in general, in the Bengali language, and it derives from tanka, a Sanskrit word for an ancient silver coin. Taka is used as a subunit of other currencies, but only in Bangladesh is it used as the primary currency. However, the Bangladeshi people also refer to the Indian rupee as taka. Decisions for Bangladeshi currency originate in the Ministry of Finance, but are carried out and overseen by the Bangladesh Bank.
Bangladesh began as East Bengal, a province first of India then of Pakistan. The nation gained independence in 1971, taking the Pakistani rupee as its first currency. One year later, the taka was introduced at an on-par rate with the Pakistani rupee. The international value of the taka when it was introduced was about 1 BDT: 7 AUD. However, the value of the taka went through a steady decline until 1988. The first attempts to halt the decline were accomplished through the International Monetary Fund (IMF), but the Bangladeshi government was unwilling to cooperate with all of the terms and conditions of the IMF. Bangladesh finally took a more serious stance at correcting the decline in value of the taka by forming the World Bank of the Bangladesh Aid Group. After going through periods of extreme devaluation, the taka finally stabilized at around 33 BDT: 1 AUD, but has since declined again to 80 BDT: 1 AUD in 2011.
The Bangladesh Bank – Central Bank of Bangladesh was established in 1972 and now has offices in nine cities around the country. The functions of the Bangladesh Bank include formulating and implementing basic currency and credit policy, supervising commercial banks and financial institutions, managing reserve funds, regulating payment systems and acting as the bank of the Bangladeshi government. The Bangladesh Bank has a more complicated relationship to the government than do most central banks. While the Bangladesh Bank is responsible for issuing currency in the form of coins and banknotes, the Ministry of Finance retains responsibility for issuing banknotes in denominations of one and two taka. One-taka and two-taka notes bear the official seal of the Ministry of Finance, unlike other denominations.