Bangladesh and India on Tuesday began much-awaited trade transactions in rupees, with an aim to reduce dependence on the US dollar and strengthen the regional currency and trade. This is the first time Bangladesh has done bilateral trade with a foreign country other than the US dollar.
Bangladesh Bank Governor Abdur Rauf Talukdar described the introduction of trade settlement in rupees as "the first step in a great journey".
"Trade terms between India and Bangladesh have witnessed significant growth, with both countries benefiting from their economic cooperation," he said at the launching ceremony here. Indian High Commissioner Pranay Verma also attended the ceremony.
The central bank governor said the transaction cost during trade with India will be reduced with the introduction of the Taka-Rupee dual currency card, which is almost set to be launched from September.
However, Bangladesh and India conduct border trade in a semi-formal manner in certain areas called "border huts" where the two currencies are exchanged on a limited scale.
Officials said that as part of the formal arrangement, from now on trade will be done initially in rupees and then gradually in Bangladeshi currency taka once the trade gap between the two countries narrows.
Banks in Bangladesh and India have been permitted to open a Nostro account, an account with the other country's bank, for the purpose of foreign exchange transactions.
Officials said the exchange rate will be determined according to market demand and the banks involved in the process.
According to the latest official data from Dhaka, Bangladesh's exports to India are worth US$2 billion, while Bangladesh's imports from India are US$13.69 billion.
However, many economists said that Bangladesh would not be able to quickly take advantage of the new system due to the trade deficit.
But Talukdar said he is not just looking at this US$2 billion export, as "when we export and import in Indian rupee, it will have an impact on exporters and importers of both the countries".
“We can increase our exports manifold, because customers in India will buy things in their own currency, consider it as their own product… It will open a new window for us in a big way in this (Indian) market because India is a big market. said the Talukdar.
The Indian envoy said that India-Bangladesh relations have changed a lot in the last decade.
"One of the most important manifestations of that change is our markedly growing economic and commercial ties and connectivity links," he said, adding that Bangladesh is India's largest trading partner in South Asia, and the fifth largest globally. is a business partner.
He said that bilateral trade has more than doubled in the last five years.
The country's exports to India have crossed the $1 billion mark for the last three consecutive years and crossed the $2 billion mark for the first time during the last financial year.
India, with its diverse market, has emerged as the top export destination for Bangladesh in Asia.
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