Trade arrangement in Rupee cuts transaction cost: BB

A new era in currency diversification for external trade has begun as Bangladesh and India started formally trading in rupees which is expected to reduce transaction costs benefitting both sides, observed Bangladesh Bank (BB).

"Through the new arrangement, another currency has come into our trade which will save a huge amount of transaction cost. There will be an impact on product prices. The new arrangement is likely to help increase the country's export," Bangladesh Bank spokesperson Mezbaul Haque said on Tuesday.

He made the remarks at a press conference at the central bank headquarters in the city, organised by the regulator, marking the launching of the settlement of Bangladesh and India bilateral trade through Indian rupee (INR) in the city's Le Méridien hotel.

Bangladesh Bank Governor Abdur Rouf Talukder attended the event as the chief guest, while Senior Secretary of the Commerce Ministry Tapan Kanti Ghosh, Indian High Commissioner in Dhaka Pranay Verma and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Jashim Uddin, among others, were present.

Two export letters of credit from Bangladesh's two businesses – Tamim Agro and Shahjahan Mia – involving a total of 28 million Indian rupees and two import LCs involving 12 million Indian rupees by Nita Company and Abdul Matlub Ahmad were handed over by four participating banks – Sonali Bank, Eastern Bank of Bangladesh and India's State Bank of India and ICIC Bank – at the event.

At the press conference, Mezbaul Haque said bilateral trade between different countries is being settled through such kind of arrangement. They have introduced such kind of settlement for reducing their transaction cost, he added.

/KN/