Bangladesh and India Launch Trade Transactions in Rupees
- Bangladesh and India have initiated trade transactions in rupees, aiming to reduce reliance on the US dollar and strengthen regional currency and trade.
- This bilateral trade agreement marks a significant milestone for Bangladesh, moving beyond the US dollar for trade settlement with a foreign country.
Trade Settlement in Rupees: A Historic Step:
- Bangladesh Bank Governor Abdur Rouf Talukder describes the launch of trade settlement in rupees as the “first step in a great journey.”
- The move signifies the growth and economic cooperation between India and Bangladesh, fostering mutual benefits.
Reduced Transaction Costs and Dual Currency Card:
- The introduction of the Taka-Rupee dual currency card, expected to be launched from September, will further facilitate trade between the two countries.
- The dual currency card will help reduce transaction costs during trade with India, enhancing convenience for traders and strengthening economic ties.
Formalizing Trade in Rupees:
- While frontier trading has existed between Bangladesh and India in certain areas called “border huts,” formal trade will now be conducted in rupees.
- Initially, the trade will be transacted in rupees, with a gradual shift towards using the Bangladeshi currency, Taka, as the trade gap decreases.
Nostro Accounts and Market-Based Exchange Rate:
- Banks in both Bangladesh and India have been granted permission to open nostro accounts for foreign currency transactions.
- The exchange rate will be determined based on market demand, ensuring transparency and efficiency in the trade process.
Trade Figures and Economic Outlook:
- According to official data, Bangladesh’s exports to India amount to USD 2 billion, while imports from India are valued at USD 13.69 billion.
- Some economists express skepticism about the immediate benefits for Bangladesh due to the trade deficit. However, Governor Talukder emphasizes the broader impact on exporters and importers in both countries.