Bangladesh could soon start trading with India using rupee instead of US dollar, trial for which has been done by Bangladesh Bank recently.The ministry of commerce has placed a written recommendation at the last cabinet meeting regarding the possibility and opportunity of using rupee instead of dollar. Currently Bangladesh exports goods to India worth around USD 2 billion. “The use of rupee will start with Bangladesh's $2 billion trade with India. Bangladesh Bank has almost finished all kinds of trials in this regard. Trading in rupee will be introduced in both countries only after bilateral decision on some issues,” an executive director of Bangladesh Bank told UNB. Read More: Bangladesh Bank yet to allow Indian rupee in foreign trade Wishing anonymity, he said that banking systems in India and Bangladesh have to sign separate agreements on using rupee. Meanwhile India-Bangladesh Chamber of Commerce and Industry (IBCCI) has submitted the total trade account to the central bank in the form of a proposal. This initiative is being taken to overcome the existing dollar crisis, sources said. Bangladesh Bank spokesperson Md Mezbaul Haque said that India-Bangladesh trade, using rupee instead of US dollar, is still in the experimental stage. Some issues still need to be settled. “There are some bilateral issues that need to be resolved. Then the banks have to prepare. But there will be a positive decision in this regard,” he added. Read More: Indian businesses eager to invest in various sectors In response to a question whether there will be a fixed annual dollar quota for opening LCs, he said, LCs will be opened according to the needs of businessmen. But the only source of rupees is from the export earnings of Bangladeshi goods in India. “We are importing more from India than we export. This is why there is a trade deficit. As a result, the amount of rupee is also being considered,” Mezbaul said. Currently India is trading in rupees with Russia, Mauritius, Iran and Sri Lanka. At the Bangladesh-India ministerial meeting on trade, held in the Indian capital New Delhi on December 22-23 last year, India proposed to introduce the rupee as a medium of trade for both countries. Read More: Bangladesh maintains close ties with all – China, US and India: PM tells CNN Then, on the sidelines of the meeting of G20 Finance Ministers and Central Bank Governors held in Bengaluru, India on February 24-25, there was a discussion between the two countries about moving the dollar as an exchange currency. There, Bangladesh Bank Governor Abdur Rauf Talukder and Reserve Bank of India Governor Shaktikanta Das discussed the possibility of such a system using rupee instead of US dollar.

Cash-strapped Pakistan’s currency plunged Thursday against the dollar after the government indicated it was ready to comply with tough conditions set by the International Monetary Fund for the next tranche of its bailout package. Pakistan is seeking a crucial installment of $1.1 billion from the fund — part of its $6 billion bailout package — to avoid default. Talks with the IMF on reviving the bailout stalled in the past months. The rupee closed at 230 to the dollar on Wednesday. It slipped further, trading at 255 for $1 within hours of the market reopening Thursday. The government did not immediately comment on the developments. Analyst Ahsan Rasool says the rupee’s decline is a sign that Pakistan was close to securing the much-needed loan from the IMF. The rupee's slide comes days after Prime Minister Shahbaz Sharif said his government was ready to adhere to the “tough conditions of the IMF" to revive the $6 billion bailout package, which has been on hold for the past several months. Read more: Pakistan orders malls to close early amid economic crisis Pakistan is currently grappling with one of the country’s worst economic crisis amid dwindling foreign exchange reserves. That has raised fears that Pakistan could default, although Sharif insists it pulled the country from the brink of the default when it took over last year. Sharif has blamed Prime Minister Imran Khan and his government for the economic malaise. Khan was ousted in a no-confidence in Parliament in April, and has since been campaigning for early elections.

Bangladeshi businesses cannot use Indian rupee for foreign trade as Bangladesh Bank is yet to enlist the currency to settle letters of credit (LCs). BB spokesperson and executive director Md Serajul Islam told UNB that the central bank is yet enlisted Rupee for foreign trade. He said that Bangladesh Bank is reviewing currency diversification in foreign trade to reduce sole dependence on the US dollar. Read:“Use rupee, taka”: India asks exporters to refrain from trading in dollars with Bangladesh Before allowing any foreign currency for trading, the central bank has maintained an exchange stander, and stability in line with the IMF standard, he said. Businesses said if trade between Bangladesh and India happen in local currencies, pressure from falling US dollar reserves and associated ongoing forex market instability can be reduced. They said India is the second largest source of imports of raw materials and other goods for Bangladesh. Industrial raw materials, capital machinery, cotton, yarn, fabrics, and chemicals worth USD 16.19 billion were imported from India in the fiscal year 2021-22. Read:Bangladesh’s forex reserves now $36.90 billion At the same time, Bangladesh exported goods worth USD2 billion to the neighbouring country. On September 15, Bangladesh Bank allowed banks to open accounts in the Chinese currency yuan. IMF has recognized five countries’ currencies as “high-value”. The Chinese yuan was admitted to IMF’s high-value currency basket in 2016. Since then, the yuan has become stronger than ever as per a currency review by the IMF. Read Sri Lanka hopes to reach initial agreement with IMF for help