New Delhi: Two Bangladeshi banks are set to introduce trade transactions using the Indian rupee as they aim to bolster forex reserves and reduce dependence on the US dollar, Bloomberg reported.
Eastern Bank and Sonali Bank will offer rupee trade services, with Eastern Bank announcing its plan on July 11, the report said.
This move aligns with a global trend of relying less on the dollar and utilizing local and regional currencies to safeguard foreign exchange reserves during crises.
In the fiscal year 2021-22, Bangladesh imported goods worth around $14 billion from India, making it the second-largest supplier after China, it said.
However, Bangladeshs exports to India during the same period amounted to only $2 billion.
The introduction of rupee-denominated trade transactions is expected to facilitate a portion of the bilateral trade, especially Bangladeshs imports from India, the report added.
The use of the Indian rupee in trade transactions is anticipated to benefit businesses by minimizing exchange losses and expediting transaction processes.
Bangladeshs foreign exchange reserves have declined from $41.88 billion to $31.16 billion, prompting the country to adopt a more market-driven exchange rate to stabilize reserves, according to the report.
To further conserve dollars as forex reserves dwindle, Bangladeshs central bank plans to launch a taka and rupee debit card in September.
This initiative aims to reduce currency conversion losses and allow Bangladeshis to spend up to $12,000 worth of rupees annually in India under the travel quota.
The introduction of the card is expected to lower the loss by 6%, according to Governor of Bangladesh Bank Abdur Rouf Talukder.
