Dhaka wants to trade with Delhi in rupees-News Focus bd

♦ half a dollar of the reserve will be saved ♦ Commerce ministries of two countries are working on a currency swap ♦ Opinion of Bangladesh Bank NBR will be taken.

India - Bangladesh

Dhaka has offered to trade in rupees against Delhi's proposal to trade in rupees to reduce pressure on the dollar in bilateral transactions. He said, if the Indian currency rupee is to be included in international transactions, Delhi should also recognize the rupee as an exchange currency. The commerce ministries of the two countries are now working on this proposal.

According to sources, in the recent trade ministerial meeting of the two countries held in New Delhi, India offered to trade in rupees. Then Commerce Minister Tipu Munshi proposed to trade in taka against Rs. Now the two sides are examining the matter.

Additional Secretary of the Ministry of Commerce (FTA) Noor Md. Mahbubul Haque told Bangladesh Pratidin, "In the ministerial level meeting, they said on behalf of India, since there is a shortage of dollars, whether bilateral trade can be done in rupees or not." Our proposal was that there would be a 'give and take' if in Rs. That is, if they do their trade in rupees, our trade will be in taka. It will convert from rupees to rupees and rupees to rupees, rather than rupees to dollars, or dollars to rupees. Doing this will reduce the pressure on the dollar.

Bangladesh's bilateral trade with India is about US$18 billion, which is currently more than half of the central bank's total foreign exchange reserves. If the transaction process is started in taka-rupee between the two countries, almost half of the reserve will be saved in dollars.

According to central bank sources, the country's foreign exchange reserves fell to 32.51 billion dollars after the payment of Asian Clearing Union (ACU) liabilities on Monday. Last January 4, the number of reserves was 33.78 billion dollars. Over $1 billion of reserves were spent in just two months of debt servicing. Almost all of these deposits are import expenses from India. Pakistan, Nepal, Bhutan, Sri Lanka, Myanmar, Iran, and Maldives have minor liabilities. These countries including Bangladesh are members of Akur. According to the related sources, the main reserve currency of Bangladesh Bank is US Dollar and Euro. If transactions with India are done in rupees, then the one to one and a half billion dollar liability in dollars and euros every two months due to Akur payment will be greatly reduced. This will reduce the pressure on the dollar to a large extent. However, the ministry of commerce is looking into how Bangladesh is able to trade in taka-rupee excluding dollars. Officials said that the current total trade between the two countries is about 18 billion US dollars. Out of this, India's export amount is 16 billion dollars, on the contrary, Bangladesh's export is 2 billion dollars. It appears that Bangladesh will earn a maximum of 2 billion rupees by exporting goods to India after going for a currency swap as per India's proposal; On the other hand, India will get about 16 billion dollars in exports to Bangladesh. If India is to pay this debt in rupees, Bangladesh will be able to pay the maximum amount of rupees equivalent to 2 billion dollars. The deficit will be another $14 billion in liabilities. Will Bangladesh pay the 14 billion dollar debt by buying rupees with dollars? While searching for an answer to this question about currency swaps with India, the proposal to trade in taka against the rupee came up. This is the gap in the transaction, here the officials of the Ministry of Commerce think that the money can be included. Nur Md. Mahbubul Haque said, "I will certainly not buy rupees with dollars and do transactions with those rupees." That is why we have said (to India), you send the proposal, and our Bangladesh Bank, NBR will check its feasibility.

Wikipedia: Dhaka