Bangladesh has announced its intention to move away from using the dollar in trade settlements and instead opt for the rupee and yuan. Bangladesh Bank Governor Abdur Rouf Talukder revealed this development, as reported by Xinhua news agency.
"We have already initiated the introduction of bank cards with dual currency (rupee and yuan) transaction capabilities," stated Talukder, as cited by the agency. It has been reported that Sonali Bank, a leading state-owned commercial bank, and Eastern Bank Limited, a private bank, have already commenced settling transactions in rupees.
The decision to abandon the dollar stems from Bangladesh's foreign exchange reserves experiencing a significant decline in May 2023, reaching a seven-year low of $30 billion. The country is now faced with the necessity of diversifying its asset holdings into alternative currencies to mitigate the trade deficit and sustain economic growth amidst escalating global energy prices. Experts attribute the decline in foreign exchange reserves to reduced exports of textiles, ready-made garments, and jute goods to the United States and European countries, which constitute over 80 percent of Bangladesh's foreign trade.
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Based on materials from TASS