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BB seeking alt ways to trade with Russia

Central bank prefers currency swap method
Staff Correspondent
10 Jul 2023 22:23:33 | Update: 11 Jul 2023 15:17:58
BB seeking alt ways to trade with Russia

The Bangladesh Bank is on the lookout for ways to trade directly with Russia, as most of the import-export trade with the country is currently being conducted through third countries after SWIFT banned major Russian banks.

The Society for Worldwide Interbank Financial Telecommunication removed key Russian banks from its system in March last year, after the country invaded Ukraine. The move disconnected Russia from the international financial system, and disrupted its ability to operate globally.

SWIFT is considered the backbone of the international financial transfer system as over 11,000 financial institutions in more than 200 countries are linked with the system.

Bangladesh Bank’s Foreign Exchange Policy Department (FEPD) organised a meeting in this regard on Monday at its headquarters in Dhaka.

Md Zakir Hossain Chowdhury, executive director of the department, presided over the meeting, while FEPD officials and representatives from commerce ministry and the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) were present at the meeting.

A FEPD official who was present there, said on condition of anonymity, “We are organising meetings aimed at finding ways for direct trading with the country.

“At Monday’s meeting, we requested the commerce ministry to identify the products that are imported and exported through third countries. The Bangladesh Bank also informed the ministry to compile a list of potential products eligible for exports to Russia.”

Meanwhile, central bank officials who attended the meeting said the regulator is currently in favour of currency swap for trading with the country. The issue of currency swap with Russia for smooth bilateral trade has been under discussed for some time.

The Business Post reached out to central bank spokesperson Md Mezbaul Haque, but he declined to comment on the matter at this time.

The Bangladesh in November of 2021 approved a currency swap with the Bank of Russia to make the payment method easier between the two central banks, and promote bilateral business.

However, the currency swap deal with the nation is yet to be finalised. Bilateral trade between the two countries increased considerably in the last few years.

Bangladesh mainly exports apparel items, jute, frozen foods, tea, leather, home textiles and ceramic products to Russia. But there is a massive scope for exporting seafood, potato and pharmaceutical products in Russian markets.

Bangladesh’s imports from Russia include cereals, minerals, chemical products, plastic products, metal, machinery and mechanical equipment. Russia can export capital machinery, fresh and dried fruits and raw sugar.

According to the Export Promotion Bureau (EPB), the country’s exports to Russia usually reach $665 million, while imports hit $481.88 million annually.

Exports to the promising market of Russia witnessed a 27.87 per cent fall in FY23 when compared year-on-year, because of the ongoing Russia-Ukraine war.

Moreover, Bangladesh’s exports to Russia in the just concluded FY were the lowest in the last five consecutive fiscal years, according to the Export Promotion Bureau’s (EPB) latest statistics.