De-dollarization continues: Bangladesh and India to trade in national currencies
Bangladesh and India have decided to ditch the US dollar and conduct bilateral trade settlements in their currencies, a Bangladesh Bank official told Anadolu.
This decision was made due to foreign currency liquidity issues faced by Bangladesh, which disrupt the flow of imports into the country.
The move would also cut a number of costs associated with using the US dollar, replacing it with Indian rupees and Bangladeshi taka.
Part of the cost-cutting benefits comes from avoiding currency conversions that has to be done several times in traditional settlements, said Mezbaul Haque, executive director of Bangladesh Bank.
"Such a decision will cut the cost of business, speed up transactions, and boost regional trading," he said.
The de-dollarization process would start in June, as banks in India and Bangladesh are already opening transacting accounts to their partners to facilitate settlements, according to Haque.
Numerous countries have recently begun actively substituting the use of the greenback settle bilateral trade transactions. Argentina and Brazil have decided to pay for Chinese imports in the yuan, Kenya is paying for Saudi Arabia's oil in shillings, while Russia accepts payment for gas only in rubles.
The BRICS nations also plan to discuss at the summer summit the issuance of a bloc-wide currency to substitute the US dollar.
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