Dhaka rules out alternative currency payments with Moscow

Bangladesh cannot facilitate a second-currency-payment system with Russia outside the US dollar at this moment due to international financial regulations, officials say.
However, Dhaka has suggested that a Russian delegation negotiate directly with the Bangladesh Bank (BB) to explore how to settle outstanding loans and bilateral trade using an alternative currency like the Indian Rupee (INR), they say.
The development emerged during a preparatory meeting held in Dhaka on Wednesday ahead of the upcoming "Bangladesh-Russia Intergovernmental Commission on Trade, Economic, Scientific, and Technical Cooperation (IGC)".
The meeting included representatives from Bangladesh's Economic Relations Division (ERD), relevant ministries, and a visiting five-member Russian delegation.
The IGC is expected to be held in September or October this year, ERD officials say.
According to the ERD, it arranged a tripartite preparation meeting with a visiting Russian team and the ministries concerned for making preparations and identifying the talking points at the next commission.
Ahead of the IGC, Russia proposed some subjects for discussion at the fifth intergovernmental commission, ERD officials say.
The Russian delegation and representatives from the relevant ministries and agencies took part in Wednesday's meeting at the ERD.
"Bangladesh is ready to pay all the dues in US dollar. We do not have any alternative currency payment options at this moment. We have requested Russia to sit with the Bangladesh Bank to settle their plea," a senior ERD official said.
A central bank official attending the meeting also informed the delegation that the issue could be discussed at the Bangladesh Bank.
A Bangladesh Bank official told The Financial Express the current guidelines locked the usage of alternative currencies like INR strictly to bilateral Indo-Bangladesh trade.
Routing payments to a third country like Russia would violate the current central bank protocols, he said, adding that adjusting it would require a new trilateral framework to legalise cross-border clearing of non-Indian trade via INR.
He emphasised that the country must strictly comply with global financial rules and monitoring systems.
This regulatory alignment currently prevents the framework from accommodating alternative and direct Ruble-Taka mechanisms requested by Moscow to bypass Western sanctions.
The US dollar remains the mandatory pipeline for major sovereign transactions in Bangladesh's formal banking sector.
Due to international sanctions on Russia, the main repayment schedule for the $11.38 billion Rooppur Nuclear Power Plant (RNPP) project loan has been formally deferred by 18 months.
The first instalment is now rescheduled for September 15, 2028.
At the meeting on Wednesday, Russia requested Bangladesh to remove obstacles on the way to its import of Bangladeshi ready-made garment products, said an ERD official.
Bangladesh agreed to the proposal, which would be discussed at the next IGC, he said.
Both sides agreed to discuss the enhancement of bilateral trade, as well as cooperation in energy, technical education, and small and medium enterprises (SMEs), he added.
Another ERD official said, "The next IGC would facilitate Bangladesh-Russia trade and cooperation."
Russia recently emerged as one of the important development partners with its $11.38 billion loan commitment to Bangladesh for constructing the Rooppur plant in Pabna.
Besides, Moscow and Dhaka have had some bilateral trade and economic cooperation for a long time.
Bilateral trade turnover between Bangladesh and Russia has sustained momentum, hovering above $2.0 billion annually for three consecutive years.
Bangladesh stands as Russia's second-largest trading partner in South Asia.
Bangladesh's ready-made garment (RMG) and textile exports to Russia have faced a sharp contraction due to the war in Ukraine and subsequent payment blockades.
While annual exports previously exceeded $500 million, they dropped to around $245 million during the July-May period of the 2025-26 fiscal year.
Bangladesh relies heavily on Russia for essential state imports, primarily wheat, industrial machinery, and fertilisers.

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