Bangladesh Bank on Tuesday announced that it would allow banks to open foreign currency clearing account with the central bank in Chinese yuan (renminbi).
To this end, the central bank’s foreign exchange policy department issued a circular on the day keeping other provisions of the Guidelines for Foreign Exchange Transactions-2018 unchanged.
Officials of central bank said that the central bank’s approval in this regard would help bilateral trade between Bangladesh and China.
Exporters and importers would be able to get rid of the costs that arise due to exchange of currency from Chinese yuan to the US dollar and then to Bangladeshi currency taka while conducting bilateral trade, they said.
Opening letters of credit in the Chinese currency against import might help contain the growing pressure over the US dollar on the back of sharp increase in import payments, they said.
The growing pressure over the dollar and the subsequent increase in the currency’s exchange rate were also amplifying risk of inflation, the BB officials said.
Due to huge import pressure, the interbank dollar exchange rate increased to Tk 83.75 on Monday from Tk 78 in January, 2016.
The country’s import payments increased by 25.23 per cent to $54.463 billion in last financial year of 2017-2018 against $43.491 billion in FY17.
Apart from the benefits for business to business trade, the government to government payments would also be benefited due to the new facility of opening foreign currency clearing account in Chinese yuan, they added.
Before the renminbi inclusion, the authorised dealers of banks were allowed to open foreign currency clearing account with the central bank in currencies of five countries — US dollar, pound sterling, euro, Japanese yen and Canadian dollar.