Bangladesh Moves Beyond Dollar to Settle Trade With India in Rupee

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Bangladesh is all set to settle trade with India in Rupee from Tuesday, a move to cut their reliance on the American currency, which was involved in nearly 90 per cent of global forex transactions in 2022, The Daily Star reported.

Bangladesh Bank and the Indian High Commission are expected to announce the news regarding the Indian currency at an event at Le Meridien Hotel in Dhaka tomorrow.

The central bank governor and the Indian high commissioner will also join, a Bangladesh Bank (BB) official said.

The BB has already given permission to three banks – Sonali Bank, Eastern Bank and State Bank of India (SBI) in Bangladesh – to open nostro accounts with their counterparts in the neighbouring country.

The nostro account is an account that a bank holds with a foreign bank in the currency of the country where the funds are held. It is used to facilitate foreign exchange and international trade transactions involving foreign currencies.

This new move will open the letters of credit in the rupee to source a portion of the products from the neighbouring country and thus cutting the use of the US dollar to some extent, according to The Daily Star.

Source: Economic Times