Bangladesh, India bid for wider local-currency trade

Bangladesh and India discussed means of expanding areas of local-currency trade as a way of dodging dollar dearth, a monetary crunch that affects many economies worldwide.

Officials said the matter came up during discussion on a wide range of bilateral issues in a meeting between Foreign Minister Dr Hasan Mahmud and Indian envoy in Dhaka Pranay Verma on Monday.

"This was a courtesy call, but we discussed a wide range of bilateral issues, especially initiative of making payment for bilateral trade through local currency," the minister said.

"The payment system through local currency for bilateral trade started on a pilot basis recently. But now we have discussed how to expand it, and how to make it more popular," the new foreign minister told the media after the meeting was over.

"It will help us to reduce our dependency on dollar," he said, in the wake of depleting reserves of the greenback that prompted the government to get tightfisted and restrict non-essential imports.

Of late, there has been a 'de-dollarization' move in the global arena, like currency swaps in trade between countries and alternative international payment system against SWIFT to duck western sanctions.

Cross-Border Interbank Payment System (CIPS) is a payment system touted by China that offers clearing and settlement services for its participants in cross-border renminbi (RMB) payments and trade. In 2022, CIPS processed around 96.7-trillion yuan, equivalent to US$14.03-trillion transactions with 1427 financial institutions in 109 countries and regions connected to the system.

This was the first call by a foreign envoy on the Foreign Minister after assuming his office in after-election switch from the information ministry.

Terming India most important and closest neighbour, Mr Mahmud mentioned that Bangladesh wants to work closely with India for promoting bilateral relations.

He cited a few areas of engagement like connectivity, water, coastal shipping, trade and investment.

He emphasized start of work on renewal of the Ganges Water Sharing Treaty, which will expire in 2026.

He also feels the urgency of resolving the pending issues amicably.

Responding to a question he said BNP is taking resort to act of arson in the name of movement and protest and so no discussions can be held with who patronizes this kind of "heinous activities".

During the parley, Mr Hasan Mahmud, who is also senior joint secretary of the ruling Awami League, mentioned the holding of the 12th parliamentary election in Bangladesh on January 7 in a "free, fair and participatory" manner.

He also noted that international election observers and media who visited Dhaka to cover elections expressed their satisfaction over the election process.

The Foreign Minister thanked the Government of India and its External Affairs Minister Dr S. Jaishankar for sending message of congratulations on the election win.

The Indian High Commissioner congratulated the Foreign Minister and expressed desire to work together in the diplomatic arena.

He termed the year 2023 one of the most successful years in the bilateral ties as a number of notable achievements like the inauguration of a few projects related to connectivity and power happened.

Mr Verma stressed collaborating with each other in areas like climate change, digital payment system, startup, trade facilitation and so.

The envoy also extended an invitation to the FM on behalf of the Indian External Affairs Minister to visit Delhi at a mutually convenient time. The minister accepted the invitation and said he would visit Delhi soon.

"We discussed how over the last decade our relationship has acquired unprecedented momentum and growth under the leadership of Prime Ministers of both the countries, and how this has become irreversible and people-centric," the envoy told the media after the meeting was over.

They also discussed some recent developments that have happened in the relationship between the two next-door neighbours. "Our development partnership is benefiting the people of our two countries, and how our cooperation is making a positive impact on economic growth," he added.

"So, overall, I think we are very hopeful and confident that in the new term of this government we will be able to achieve greater momentum in our bilateral partnership and we will be able to make our development partnership contribute even more to our passion," he said.

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