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The visiting staff consultation team of the International Monetary Fund (IMF) has sought to know about the reasons behind the non-repatriation of overdue export proceeds from the authorities concerned.
During a meeting with Senior Commerce Secretary Tapan Kanti Ghosh at his secretariat office on Tuesday, the international lender stated that Bangladesh has $3 billion of unrepatriated export proceeds.
However, the commerce ministry has asked the lender to provide detailed information on how much money has not been repatriated in which years.
According to the senior commerce secretary, the IMF said exporters are not repatriating the proceeds of exports properly. The organisation also asked the authorities to find out whether export earnings are being left abroad.
Tapan said Bangladesh Bank is looking into the matter.
He told the IMF team that the authorities will look into the existing gap in export proceeds repatriation and also the gap that existed before the Covid-19 pandemic. Bangladesh Bank can provide accurate information in this regard.
He said the gap cannot be confirmed by looking at the existing situation. Authorities also need to check the data of the previous years.
Meanwhile, Bangladesh Bank Spokesperson Mezbaul Haque told The Business Post that export proceeds are overdue for a long time. The amount is being calculated regularly.
“The IMF talks about $3 billion overdue export proceeds. They will have to be specific about the duration. The central bank is trying to ensure that no money is stuck abroad.”
He said export proceeds are overdue due to various reasons, including allegations of short shipment, bankruptcy of the importers, legal complications, fraud and forgery.
There is an obligation to repatriate the export values of goods within a maximum of 120 days from the day of sending the export documents to the importer’s bank concerned following shipments of goods.
If the 120-day deadline is not met without any acceptable reason, action is being taken against the exporter, said Mezbaul.
On January 29, Bangladesh Bank instructed various banks to take initiatives to bring overdue export proceeds to the country as soon as possible. Besides, in July last year, the central bank reduced the retention quota limit out of realised export proceeds to 7.5 per cent and 30 per cent till 31 December 2022 from 15 per cent and 60 per cent respectively.
According to the central bank’s rules, exporters can retain a portion of repatriated export incomes in ERQ accounts with which they purchase raw materials and make import payments.
Due to the dollar crisis in the country and the instability of the currency exchange rate, Bangladesh Bank has also taken up measures in regards to non-return of export income on time.
In case of late repatriation of export value of goods, the central bank has directed to pay the price at the exchange rate on the date of actual repatriation.
During the meeting with the senior commerce secretary, the IMF delegation also discussed export target, exchange rate and export promotion issues.
According to Tapan, the government is making efforts to increase exports. However, it is unlikely that export growth will be higher this year compared to last year.
He also said the IMF wanted to know about reducing the dollar price gap in imports and exports.
In response, the commerce ministry pledged to take steps in this regard. Bangladesh Bank is working on it. They hope that the gap will be reduced within next July.
The senior commerce secretary said many initiatives have been taken to facilitate business. Various licences will be granted for longer periods so that it is possible to reduce the cost of business. Exports are increasing to some new markets including India and Australia. Efforts are underway to expand it further.
However, he said the country’s 57 per cent of exports are made to the European Union and the United Kingdom. Inflation in the region, alongside the USA, has reduced buyers’ demand, ultimately leading to a fall in export income.
