The government made proposal of conducting trade with Delhi in Taka in reply to Delhi’s proposal to conduct it in Rupee. This proposal was made with a view to reducing pressure on dollar in bilateral trade.
Dhaka said if Delhi wants to include Rupee in international transaction, then they will also have to recognize Taka as a medium of exchange. Now, two trade ministries have been working on the issue.
According to the sources, in a ministerial level meeting between two countries held in New Delhi recently, India proposed Bangladesh of conducting trade transaction in Rupee. Then, commerce minister Tipu Munshi gave proposal of making transactions in Taka besides Rupee. Now, the two countries are scrutinizing the matter.
Additional secretary (FTA) of Ministry of Commerce, Nur Md. Mahbubul Haque told The Bangladesh Pratidin, “In the ministerial level meeting, India have talked about the possibility of conducting transaction in Rupee as there’s a worldwide dollar crisis. On the contrary, our proposal was like ‘Give and Take,’ which means if they conduct trade in Rupee, then we’ll do it in Taka. The currency should be converted in Ruppe to Taka and Taka to Rupee rather than being converted into Rupee to dollar and dollar to Rupee. If this is possible, then pressure on dollar will be reduced.”
Bangladesh’s total bilateral trade with India is almost 18 billion dollars, which is at present more than the amount of foreign currency reserve in country’s central bank. If trade is introduced in Taka-Rupee between the two countries, then almost half of the dollars in the reserve will be saved.
According to more than one sources of the central bank, the amount of foreign currency reserve has been decreased to 32.51 billion dollars after clearing the loan of Asian Clearing Union on Monday. The reserve was 33.78 billion dollars in last January (2022). To pay the loan in last two months, more than 1 billion dollar has been spent. Almost the entire paid amount was spent to clear import cost from India. Some loan amount belongs to Pakistan, Nepal, Bhutan, Sri Lanka, Myanmar, Iran and Maldives. All of these countries including Bangladesh are the members of ACU (Asian Clearing Unon).
According to the related sources, the loan of ACU is paid through dollars, which is the main currency of foreign currency reserve of Bangladesh Bank. If the trade with India is done in Rupee-Taka, then amount of payment done to ACU in dollars and Euro with an interval of two months will be reduced to a great extent, which in turn minimizes the pressure to dollar.
However, how much capable Bangladesh is on trading Taka-Rupee instead of dollar, is the matter of concern of the ministry and they’re examining the matter. According to the officials, at present the amount of trade between the two countries is 18 billion US dollar. In this, the amount of Indian export is 16 billion dollar and from Bangladesh, it’s 2 billion. If Bangladesh goes to currency swap, then will have deficiency of 14 billion. Would Bangladesh pay the debt of dollar in Rupee?
To find the answer of this question over currency swap with India, the matter of trading in Taka for Rupee came forward. In this gap of transaction, Taka can be included, according to the ministry of commerce officials.
Nur Md Mahbubul Haque said, “I won’t conduct trade operations by purchasing Rupee with Taka for sure. So, we have asked India to send proposal; Bangladesh Bank and National Board of Revenue will study its feasibility.”
@The report was published on print and online versions of the Bangladesh Pratidin on January 10 and rewritten in English by Lutful Hoque
