Bangladesh Bank yet to allow Indian rupee in foreign trade

Bangladeshi businesses cannot use Indian rupee for foreign trade as Bangladesh Bank is yet to enlist the currency to settle letters of credit (LCs).

BB spokesperson and executive director Md Serajul Islam told UNB that the central bank is yet enlisted Rupee for foreign trade.

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

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

Businesses said if trade between Bangladesh and India happen in local currencies, pressure from falling US dollar reserves and associated ongoing forex market instability can be reduced.

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

At the same time, Bangladesh exported goods worth USD2 billion to the neighbouring country.

On September 15, Bangladesh Bank allowed banks to open accounts in the Chinese currency yuan.

IMF has recognized five countries’ currencies as “high-value”. The Chinese yuan was admitted to IMF’s high-value currency basket in 2016. Since then, the yuan has become stronger than ever as per a currency review by the IMF.