How feasible is the alternative currency of the dollar?

How feasible is the alternative currency of the dollar?
How feasible is the alternative currency of the dollar?

Bangladesh is thinking about alternative currencies to reduce dependence on dollar in international transactions. Euro is being used as an alternative. Now the Chinese currency Yuan, Russian Ruble and Indian Rupee are being considered.

Bangladesh Bank has already allowed opening of LC in Chinese currency. Commercial banks can open Chinese currency clearing accounts with Bangladesh Bank. They can also open accounts in representative branches abroad.

But the question is how much it will be possible and how useful it will be? Analysts say there are no barriers to using alternative currencies. But there is doubt as to how useful it will be. Former Managing Director of Jamuna Bank. Nurul Amin thinks that since we import more than we export, we will not have much Chinese or Indian currency.

Chairman of BRAC Bank and Executive Director of Center for Policy Researchers Institute. Ahsan H. Mansoor said, we have to convert from alternative currencies to dollars. It won’t help much.

40 percent of Bangladesh’s total imports are from China and India. According to Bangladesh Bank, 26 percent of total exports and 3.5 percent of imports are with the United States. 56 percent of total exports and 8 percent of imports are with the European Union.

The government is working keeping in mind the status of Bangladesh’s import and export trade with any country.

Former Managing Director of Jamuna Bank. Nurul Amin said that the initiative to use alternative currencies to get out of the US dollar intermediation is good. It will reduce dollar dependence to some extent. But how successful it will be depends a lot on the capacity of the country. He said, we are an import dependent country. We import goods worth seven-eight billion dollars from India. But we export one billion dollars worth of products. We export to China under one billion. But we import more than that. As a result, we will not have enough Chinese currency yuan. There will not be many Indian rupees. And why do people keep gold, because people have confidence that its price will not fall that much. People also have confidence in the dollar. Now the real question is how much mutual trust the two countries have on the currency.

Dr. Ahsan H. Mansoor said, “If I export to China and get dollars.” I can settle the cotton import bill with that dollar. Cotton must be brought from America. Then the dollar is profitable for me. Now if we convert yuan to dollar then there will be some loss here. Again the same person is not importing and exporting.

Analysts said that the international currency basket has now been made with the currencies of five countries in the world. US Dollar, British Pound, Euro, Japanese Yen and Chinese Yuan. Asian countries settle their import and export liabilities through the Asian Clearing System (ACU). There the dollar is the intermediary currency. But even so, under it both countries can use their own currency. China has also developed a cross-border interbank payment system. 30-35 countries in Asia Africa give lanes through this system. Its currency is Chinese Yuan. But even if the world economy wants to reduce its dependence on the dollar, it is happening at a very slow pace, Dr. Ahsan H. Mansoor. He said, still 59 percent of the reserves are in US dollars. Euro is about 20%. And the remaining 20 percent of all currencies. Yuan 2.25 percent. The yuan may play a role in alternative currencies. Indian rupee may also be. But ruble is not possible.

Countries that open accounts with the central banks of their two countries can avoid the dollar and transact in their own currencies. It can be Yuan, Indian Rupee, Russian Ruble in all cases. However, those who export more have the advantage. Because they will have coins. Nurul Amin said, but the matter depends on how much confidence there is in that currency. Obtaining currency is not a problem if the central bank has an account in that currency. There is another way to get currency. That is international conversion. Pounds can be converted to dollars. But the value of the coin depends on the capacity of any coin. Cross currency values ​​are determined daily on the market. This is not the work of ordinary people.

Ahsan H. Mansoor said, “We can benefit from the fact that we can use the currency we get by exporting to China and India.” But if someone wants to sell it, others may not want to buy it. It depends on the profit of the person. Dollars will be saved in terms of imports here. But that will not be the case with exports. In fact, achieving economic capability is the real thing.

26 percent of Bangladesh’s total imports come from China and 14 percent from India. Three percent of the total exports in those two countries.

Now the amount of reserves in Bangladesh is 37.13 billion dollars. And the exchange rate of one dollar in the bank is 96 taka, and 106 taka in the open market. The dollar has risen 12 percent in the past year. Courtesy: in deutsche felt

The article is in Bengali

Tags: feasible alternative currency dollar

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