SBI agrees to trade with Bangladesh in taka, not dollars

Khairul Alam, Dhaka: India’s largest bank State Bank of India – SBI has ordered to trade with Bangladesh in taka and rupee. In this instruction sent from the head office of this bank to all branches, it is said that due to the increase in import costs and the devaluation of rupees against the dollar, the foreign currency reserves of the neighboring countries are in crisis. In this situation, doing business with Bangladesh in taka and rupee will reduce the risk.

In the directive, the State Bank of India has directed Indian exporters not to settle contract prices with Bangladesh in dollars or other major foreign currencies. In a special report on SBI’s internal documents and a source, the news agency Reuters said that this decision was taken cautiously to reduce the risk in transactions when Bangladesh’s reserves are under pressure.

As a result of the Russia-Ukraine war, the price of fuel and food has increased in the world market, and Bangladesh has suffered high inflation. Current account deficit in international trade has increased. There has been a dramatic decline in foreign exchange reserves. In this situation, the government is seeking loans from global donors like the International Monetary Fund (IMF).

In this situation, a letter regarding this instruction was sent to the branches from the head office of SBI on August 24. It said, ‘The neighboring country is in dire straits of foreign exchange due to increased import costs and devaluation of the rupee against the dollar.’

The bank’s circular informed that the decision was taken to minimize dollar and other major foreign exchange risks in Bangladesh, arising from the country’s current economic situation and foreign exchange deficit. “However, transactions can be made in Indian Rupees and Takas,” it said.

Bangladesh’s foreign exchange reserves fell to $37 billion as of last Friday, from $48 billion a year ago, according to Bangladesh Bank data. Five months of import expenditure can be met with current reserves. The government of Bangladesh has asked for a loan of 450 crore (4.5 billion) dollars from the IMF to increase the reserves. In this situation, SBI does not want to increase its business risk in trading with Bangladesh, said a concerned official.

The article is in Bengali

Tags: SBI agrees trade Bangladesh taka dollars

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