HomePoliticsTaka joins hands with Rupee, ending dollar dominance for trade

Taka joins hands with Rupee, ending dollar dominance for trade

Bangladesh is one of the neighboring countries of India, which is ready to organize bilateral trade and promote business with INR and Taka, irrespective of the dollar. Local currency as a currency of exchange between India-Bangladesh will reduce the pressure on foreign exchange reserves.

India’s forex reserves up $1.65 bn to $586.4bn, shows RBI data.

Bangladesh becomes the 19th nation to trade with India in rupee as an exchange currency.

In April, a delegation of India’s central banks—RBI and SBI—visited Dhaka, the capital of Bangladesh, to discuss and finalize bilateral trade with the INR and Taka.

To start cross-border trade with India, two banks of Bangladesh – Sonali Bank and Eastern Bank Limited (EBL) – will open Vostro accounts with two Indian lenders – State Bank of India (SBI) and ICICI Bank.

Identical accounts will be opened by these two banks in two banks of Bangladesh.Transactions between the two countries will be in Taka-Rupee without involving any third currency.

“On April 11, an Indian delegation from RBI and SBI met the managing director of EBL and Sonali Bank and both sides discussed the payment method for commercial transactions in taka and rupee,” the report said.

Mohammad Mezbul Haque, executive director and spokesperson of Bangladesh Bank, said business in his country has welcomed the decision to trade with India in INR and Taka as “they feel the arrangement will boost trade and reduce pressure on forex exchange reserves.

In the report, Haque further said, “Several months back, the RBI had given instructions regarding direct transactions in rupees. “There are some procedural issues in doing such transactions”, he said.


The US currency, which has been the global reserve currency since World War II, appears to be losing its hegemony.

Many countries have abandoned trading in the dollar after the US and EU countries imposed sanctions on Russia last year following an attack on Ukraine.

French President Emmanuel Macron said last week that Europe should reduce its dependence on the US dollar.

Iran has stopped dollar trade with China and Russia. Saudi Arabia, a major OPEC member, said it would abandon the petrodollar entirely and start accepting the petroyuan.

India-Bangladesh trade relations

1.In the last financial year, Bangladesh’s imports from India were around $13.69 billion, the report said. Of which $2 billion will be traded in Indian Rupees while the rest will be paid in US Dollars.

Meanwhile, Bangladesh’s exports to India stood at around $2 billion and transactions related to it will be done in Indian rupees and takas.

2.Once we get the approval of the central banks of both countries, we will inform the customers that import-export with India can be done directly in rupees. Interested traders can then open LCs in rupees. This will reduce the cost of traders. “Again, the additional pressure due to dollar demand will ease,” said Ali Raza Iftikhar, managing director of EBL.

3. Bangladesh Chamber of Industries’ President Anwar-ul Alam Chowdhury Pervez appreciated the decision to settle bilateral trade with India in taka and rupee.

“The exchange rate of the rupee is stable against the taka. So our currency needs to be more stable before we start doing rupee transactions”, the report quoted him as saying.

4. Bangladesh is working on signing a currency swap agreement with Russia. In addition, China has offered a currency swap with Bangladesh and the proposal is being reviewed by the Sheikh Hasina-led government.

Countries trading in INR

Before Bangladesh, 18 countries started settling foreign trade with India in Indian Rupees. These countries are Russia, Singapore, Sri Lanka, Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Seychelles, Tanzania, Uganda, and the United Kingdom.


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