Bangladesh, India launch trade in local currency

DHAKA, Bangladesh (AA): Bangladesh and India have begun trade transactions in the Indian currency in a bid to reduce their dependence on the US dollar.

For the first time, Bangladesh’s bilateral trade with India is starting in the Indian rupee in addition to the US dollar. Initially, the trade will be transacted in rupee and then gradually in Bangladeshi currency Taka when the trade gap between the two countries decreases, according to the central bank of Bangladesh.

The local currency-based trade was inaugurated at an event held in Dhaka jointly organized by Bangladesh Bank and the Indian High Commission in Dhaka.

Banks in Bangladesh and India have been given permission to open nostro accounts –accounts in a bank of another country for the purpose of foreign currency transactions.

The exchange rate will be determined in line with market demand and banks involved in the process, explained Amit Kumar, State Bank of India’s head of operation in Bangladesh, in his presentation.

Dual currency card

Meanwhile, the Bangladesh central bank governor announced that his bank is going to introduce the dual currency (Taka-Rupee based) card this September.

With this card, Bangladeshi users can make purchases within the country as well as use it in India.

According to the latest official data from Dhaka, exports from Bangladesh to India amount to $2 billion, while Bangladesh’s imports from India are worth $13.69 billion.