The government has decided to conduct trade with Russia in alternative currency. Bangladesh Bank (BB) is finalizing the modalities on which currency would be used. According to sources, the alternative currency could be Chinese Yuan.
BB will finalize the proposal within a week and send it to economic relation department (ERD) and ERD will begin to held discussion with concerned authorities of Russia to make an agreement, according to the sources of the government.
According to government sources, it has been known further that Russia gave green signal over Bangladesh’s using alternative currency in export-import trade. In this regard, two virtual conferences were held between central banks of Bangladesh and Russia.
Due to Russia-Ukraine war, the developing countries of the world have become victim of difficulties in importing fuel, food and fertilizer from these countries. The whole world is in fear of grave food crisis. Moreover, Bangladesh is in problem due to hike in the price of dollar as a currency. On the other hand, because of the hindrance in supplying sufficient fuel, the production in the local mills and factories has decreased to half of its regular capacity. Now, concern has been created over food and fertilizer import.
In this circumstance, the government is emphasizing on importing food and fertilizers using alternative currency.
According to sources, with a view to make the export-import matters easier by forming an electronic trading platform, a meeting was held in ministry of commerce on Wednesday. The decision of doing trade with Russia in alternative currency was taken in the meeting.
Tapan Kanti Ghosh, senior secretary of ministry of commerce said discussion over transaction with Russia has been going on for many days and the government wants to reach a decision in this regard.
Abdur Rahim Khan, additional secretary of ministry of commerce said discussions have been done over swap system, barter trade, and virtual currency as medium of currency in trade with Russia. Among these systems, none has been agreed upon currency swap system as both the courtiers won’t able to do ‘currency swap’ in own currencies overlooking the usage of dollar or other hard currencies. Besides, Bangladesh hasn’t sufficient Ruble that can be used in import purpose. Hence, decision has been taken in favor of conducting trade with Russia using the currency of a third country.
About the possibility of using Chinese Yuan as the third currency, Rahim Khan said, “Chinese Yuan can be used as alternative currency in importing food grains and fertilizers. The decision of using currency of third country would be made upon finalizing of its modalities by BB.
According to the authorities concerned, BB has got permission in opening account in Chinese Yuan recently. As a result, besides dollar, the amount of Yuan will be increased in the possession of the central bank. Again, opening account in Yuan initiated possibilities for banks of the country to be connected with cross-border interbank payment system of Chinese network.
Already Russian banks have come into the agreement of doing commercial transaction in this alternative Chinese currency. Furthermore, neighboring country Myanmar has announced to import food and fuel from Russia using Yuan as alternative currency. Even, in order to ensure fuel security, India’s also importing coal from Russia using Yuan.
Hence, in making payment of imported food or fertilizers from Russia, it’s highly possible that Bangladesh would use Chinese currency Yuan as an alternative currency.
@The article published on print and online versions of The Bangladesh Pratidin on November 10, 2022 and rewriten in English by Lutful Hoque
