Bangladesh and India explored strategies to broaden the scope of local-currency trade as a means to navigate the challenges posed by a scarcity of dollars, a monetary constraint affecting economies globally.
The discussions took place during a meeting between Foreign Minister Hasan Mahmud and Indian envoy Pranay Verma in Dhaka on Monday (15th January), covering various bilateral issues.
Media reports claimed this adding while characterizing the meeting as a courtesy call, Hasan Mahmud highlighted that they delved into diverse bilateral matters, with a particular focus on the initiative to facilitate payments for bilateral trade using local currencies.
The Foreign Minister revealed that although the system began as a pilot project recently, the discussion aimed to explore ways to expand and popularise it.
“This approach will assist in reducing our dependency on the dollar,” he explained, acknowledging the challenges posed by dwindling dollar reserves, leading the Government to adopt stringent measures, including restrictions on non-essential imports.
The global trend of ‘de-dollarisation,’ involving measures such as currency swaps and alternative international payment systems like CIPS (Cross-Border Interbank Payment System), was also referenced.
Notably, CIPS, championed by China, processed significant transactions in 2022, showcasing its role in facilitating cross-border renminbi payments and trade.