With Bangladesh staring at a forex crisis, India’s largest public sector bank, State Bank of India, has urged exporters in this country to settle deals with their counterparts across the border either in rupee or taka.
The so-called rupee-taka option is basically an alternative payment mechanism to settle dues in rupees or taka instead of US dollars. Such a system has already got an in-principle approval from India’s central bank.
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The move by State Bank of India (SBI) aims to discourage exporters from trading with Bangladesh in major foreign currencies like dollars or Euros comes in the wake of Dhaka’s declining forex reserves because of rising inflation and energy crisis.
“Considering the present economic situation and shortage of foreign currency, it has been decided by the competent authority not to assume US dollar/other foreign currency exposure on Bangladesh till further instructions,” the SBI said in a recent circular to its branches across India.