The bilateral trade program with India will be launched in Indian Rupee on Tuesday.
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| Bangladesh and India to settle trade in Indian Rupee |
Bangladesh is starting to trade in rupees, the currency of India. For the first time, Bangladesh and India will begin conducting bilateral commerce outside of US dollars.
Although it will initially be conducted in rupees, if the trade imbalance between the two nations narrows, it will also be done in Bangladeshi Taka.
At the La Meridien Hotel in Dhaka, rupee-based bilateral transactions with India will be launched on Tuesday. The Indian High Commission in Dhaka and Bangladesh Bank collaborated to arrange the program.
The banks in charge of the exchange of rupees between the two nations are Sonali Bank, Eastern Bank of Bangladesh, State Bank of India, and ICICI Bank of India.
Sources claim that the two nations raised the subject of rupee trading for four reasons. First, there is a currency issue in both nations. As a consequence, it will be advantageous for both nations.
Second, it will lower the cost of importers' and exporters' double currency exchanges. Thirdly, the transaction settlement process will go more quickly. Fourth, you may exchange other excess currencies for rupees and utilize them to pay transactions.
Ali Reza Iftekhar, the MD of Eastern Bank, recently discussed this with Prothom Alo. The deal will first be conducted in Indian rupees. We anticipate that the topic of Bangladeshi currency will be raised at a later time.
The Bangladesh Bank reports that during the fiscal year 2021–2022, Bangladesh imported products worth $8,000,916,000,000 USD. 1 039 million dollars' worth of goods are imported from India out of this total. Bangladesh exported commodities to India for 199 million dollars during the same fiscal year. The entire value of imports and exports between the two nations during that fiscal year was 1 billion 568 million dollars. The similar pattern continued throughout the previous fiscal year, 2022–2023.
According to importers, India has been working for years to establish the rupee as a reputable currency internationally. In July of last year, the RBI, the nation's central bank, issued a notification in this regard. Even the nation's finance ministry recommended banks and trade organisations to begin conducting international transactions in Indian rupees.
The nation's businessmen have praised this move. Taskin Ahmed, a former president of the India-Bangladesh Chamber of Commerce and Industry, told Bangladeshi media that starting transactions in rupees will save at least $200 million. More dollars may be saved if the government could import rupees from a third country. With a number of nations, we have trade surpluses. There is a chance to send some of the export proceeds in rupees to those nations.
When the trade ministers of the two nations met in Delhi, India, in December of last year, the issue was brought up once more. The rupee was then offered as a medium of exchange for bilateral commerce by India. In that meeting, Tipu Munshi, the minister of commerce, said that a formal proposal will be made in this respect. Everyone agreed when Tipu Munshi notified the people involved after returning home, and it quickly became a reality.
Experts, however, caution against rushing into this. due to the Indian Rupee's lack of international monetary recognition. Mostafizur Rahman, a Special Fellow at the Center for Policy Dialogue (CPD), stated that the effort is now successful. When dealing in Rs, risks must also be taken into consideration.
The currency rate is one of the dangers. It needs to be decided. Additionally, the Bangladeshi taka is now undervalued. might get stronger in the future. The exchange rate with the Indian rupee should then be reflected. According to Mostafizur Rahman, rupee-based transactions are possible not just in commerce but also in investments and loans.
Source: Prothom Alo