Bangladesh Bank (BB) has taken a positive stance regarding a proposal from the state-owned Export-Import (Exim) Bank of China to utilize alternative financial infrastructures—specifically the Cross-Border Interbank Payment System (CIPS) and so-called 'Panda bonds' —to reduce over-reliance on the US dollar in international trade.
The issue was discussed in detail during a high-level meeting between the central bank and a Chinese delegation on Tuesday (June 9). Following the talks, central bank officials on Wednesday stated that Bangladesh Bank has no policy objections if any domestic commercial bank wishes to integrate with the CIPS network.
The possibility of raising funds through issuing Panda bonds—yuan-denominated bonds sold in China's domestic market by foreign issuers—was also discussed during the meeting.
According to a senior official of Bangladesh Bank, CIPS functions as an international transaction infrastructure, much like the SWIFT network.
"Having more transaction channels in international trade yields greater opportunities for business. Commercial banks are free to join this platform on their own initiative," the official said, adding that no regulatory barriers have been identified so far.
Experts view this development as a significant strategic opportunity for Bangladesh amid changing geopolitical dynamics in the global financial architecture and a growing worldwide push for "de-dollarization" following Western sanctions on several countries.
Financially, China remains Bangladesh’s largest source of imports, with annual bilateral trade accounting for an import volume of approximately US$20 billion to $25 billion from China. Settling a portion of these transactions in Chinese currency (Yuan/Renminbi) via CIPS could significantly ease the pressure on Bangladesh’s greenback reserves.
Economists, however, note that CIPS or Panda bonds are not standalone magical solutions. Their long-term strategic efficacy for Bangladesh will fundamentally rely on the depth of future Bangladesh-China trade, direct investment, and reciprocal financial cooperation.