BB yet to allow rupee in foreign trade

Bangladeshi businesses won't be able to use Indian Rupee for foreign trade as Bangladesh Bank (BB) is yet to enlist Rupee to settle letters of credit (LC), reports UNB.

BB spokesperson and executive director Md Serajul Islam said that the central bank is yet to enlist Rupee for foreign trade.

He said BB is reviewing the currency diversification in foreign trade to reduce the sole dependency on 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 standard, he said.

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 fiscal year 2021-22.

During the same period, Bangladesh exported goods worth $2 billion to the neighbouring country.

On September 15, the BB allowed the banks to open accounts in Chinese currency, Yuan.

IMF recognised 5 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.