Tuesday, January 9, 2024
Year : 1, Issue : 19
Dhaka: Bangladesh and India discussed means of expanding areas of local-currency trade as a way of dodging dollar dearth, a monetary crunch that affects many economies worldwide.
Officials said the matter came up during discussion on a wide range of bilateral issues in a meeting between Foreign Minister Dr Hasan Mahmud and Indian envoy in Dhaka Pranay Verma on Monday.
“The payment system through local currency for bilateral trade started on a pilot basis recently. But now we have discussed how to expand it, and how to make it more popular,” the new foreign minister told the media after the meeting was over.
“It will help us to reduce our dependency on dollar,” he said, in the wake of depleting reserves of the greenback that prompted the government to get tightfisted and restrict non-essential imports. Of late, there has been a ‘de-dollarization’ move in the global arena, like currency swaps in trade between countries and alternative international payment system against SWIFT to duck western sanctions.
Cross-Border Interbank Payment System (CIPS) is a payment system touted by China that offers clearing and settlement services for its participants in cross-border renminbi (RMB) payments and trade. In 2022, CIPS processed around 96.7-trillion yuan, equivalent to US$14.03-trillion transactions with 1427 financial institutions in 109 countries and regions connected to the system.
Terming India most important and closest neighbour, Mr Mahmud mentioned that Bangladesh wants to work closely with India for promoting bilateral relations.
He cited a few areas of engagement like connectivity, water, coastal shipping, trade and investment. He emphasized start of work on renewal of the Ganges Water Sharing Treaty, which will expire in 2026. He also feels the urgency of resolving the pending issues amicably.
Of late, there has been a ‘de-dollarization’ move in the global arena, like currency swaps in trade between countries and alternative international payment system against SWIFT to duck western sanctions.
Mr Verma stressed collaborating with each other in areas like climate change, digital payment system, startup, trade facilitation and so.
The envoy also extended an invitation to the FM on behalf of the Indian External Affairs Minister to visit Delhi at a mutually convenient time. The minister accepted the invitation and said he would visit Delhi soon.
They also discussed some recent developments that have happened in the relationship between the two next-door neighbours.