This paper deals with the factors affecting the fluctuation of exchange rate in Bangladesh. The study area is confined to only Bangladesh and study period is from January 2012 to December 2016 that means 60 months data of all variable has been collected. Some statistical analyses are conducted such as descriptive statistics, correlation, and regression. Descriptive statistics shows minimum, maximum, mean and standard deviation of all variables. To find out the strength and direction of relationship between variables, correlation analysis is conducted. The impact of each independent variable on exchange rate is analyzed through regression. All of this statistical analysis is conducted through SPSS-16 software. Here exchange rate is considered as a dependent variable and inflation, interest rate, balance of payment, balance of trade, remittance, export and import as independent variables. Exchange rate is taken BDT against US$. Some other factors have impact on exchange rate such as gross domestic product, government debt, government regulation, political stability and performance, recession and speculation etc. Along with the relationship and impact of independent variables on dependent variable, recent trend and its comparison with some neighboring countries are presented. The result of correlation analysis shows significant positive relationship of inflation, interest rate and balance of payment with exchange rate. Inflation also shows strong positive relationship with exchange rate that indicates if inflation changes, exchange rate changes by the same changing pattern. On the other hand, the strength of relationship of interest rate and balance of payment with exchange rate is weak. Export and import of Bangladesh indicates significant negative correlation with exchange rate and the strength of association is moderate. There is no significant relationship of remittance and balance of trade with exchange rate. The regression model shows that inflation has greater impact on exchange rate than any other specified independent variables.