Export proceeds realisation guidelines tightened

Bangladesh Bank (BB) has tightened the guidelines for realisation of export proceeds, asking the authorised dealers to apply the exchange rate of the 'due date' in case any bill is realised after that date - four months from the day of shipment.

The central bank issued the directive to the banks in a circular on Monday, apparently in a move to expedite inflow of US dollar amid falling foreign-exchange reserves in the country.

The forex reserves fell to US$32.30 billion as on March 1, 2023 from $45.99 billion on the same day a year ago, BB data showed.

In accordance with the Guidelines for Foreign Exchange Transactions (GFET) 2018, exporters are subject to realise their export proceeds within four months of shipments.

In order to bring discipline in realisation of the export proceeds, it has been decided to initiate appropriate measures in the cases where export proceeds are not realised within the prescribed period, the BB said in its latest circular.

In the cases of delayed realisation, the banks will apply the prevailing exchange rate for encashment into the taka.

But banks will make payments to exporters applying the rate on the date at which the proceeds should have been realised as per the BB's latest instruction. An exporter now gets Tk 104 per US dollar.

"The decision will be applicable in the case of adverse exchange rate differences between the due date and the realised date during the period," it said.

The difference between the taka proceeds of the current rate and the previous rate needs to be retained in separate subsidiary ledgers of banks, according to the circular.

The banks will submit monthly reports with regard to the amount retained in subsidiary ledgers to the central bank within 10 days of the following month.

This process will, in case of delayed realisation, equally be applicable for the encashment of unused value-added portion of the export proceeds, it said.

The value-added portion refers to the export proceeds that are available to exporters after payments of their import bills against back-to-back letters of credit (LCs).

Banks have been asked to use the amount held in the subsidiary ledgers in accordance with the instructions from the BB.

There is allegedly a tendency among a group of exporters to sell their export proceeds when they get a better rate of the US dollar and such tendency is creating indiscipline in the foreign exchange market.

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