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Bangladesh yet to allow rupee in foreign trade: BB

UNB . Dhaka
22 Sep 2022 16:39:38 | Update: 22 Sep 2022 16:56:08
Bangladesh yet to allow rupee in foreign trade: BB
A cashier displays the new 2000 Indian rupee banknotes inside a bank in Jammu on November 15, 2016 — Reuters Photo

Bangladeshi businesses will not be able to use the Indian rupee for foreign trade as the Bangladesh Bank is yet to enlist rupee to settle letters of credit (LC).

BB spokesperson and Executive Director Md Serajul Islam told UNB that the central bank has not enlisted rupee yet for foreign trade.

He said that the Bangladesh Bank is reviewing the currency diversification in foreign trade to reduce the sole dependency on the US dollar.

Before allowing any foreign currency for trading, the central bank has to maintain an exchange standard and stability in line with the IMF standards, he said.

ALSO READ - Banks now allowed foreign trade in Yuan

The businesses said if trade between Bangladesh and India take place in local currencies, pressure from falling US dollar reserves and ongoing forex market volatility would be reduced to some extent.

They said India is the second largest source of imports of raw materials and other goods and services for Bangladesh. Industrial raw materials, capital machinery, cotton, yarn, fabrics, and chemicals worth $16.19 billion were imported in the fiscal year 2021-22.

At the same time, Bangladesh exported goods worth $2 billion to the neighbouring country.

On September 15, the central bank allowed the banks to open accounts in the Chinese currency yuan.

The IMF (International Monetary Fund) recognised five countries’ currencies as high-value currencies.

Yuan was recognised as the IMF's high-value currency basket in 2016. Since then, yuan has become stronger than ever as per a currency review by the IMF.