Bangladesh starts yuan-based trade with China
| by Naim-Ul-Karim DHAKA, Aug. 16 (Xinhua) — Bangladesh has joined the club of scores of countries confide in yuan to settle trade with China. In an apparent move seen to yield long-term benefit for both the countries, Bangladesh paved the way for all authorized banks to open Chinese yuan accounts. The Bangladesh Bank (BB) has asked all Authorized Dealers (ADs) of Foreign Exchange in the country to open foreign currency clearing account with Bangladesh Bank in Chinese yuan. BB Exeutive Director Md. Serajul Islam told Xinhua Wednesday that yuan-based trade with China will yield long-term benefits for both the countries. He said AD banks that were allowed for foreign currency clearing accounts with the BB in U.S. dollar, pound sterling, euro, Japanese yen and Canadian dollar will now be able to use renminbi or yuan for payments in all bilateral trade. ” It has now been decided that AD may open foreign currency clearing account with Bangladesh Bank in Chinese Yuan Renminbi (CNY) also,” Md. Kawsar Matin, deputy general manager of BB Foreign Exchange Policy Department, said in a notification. And also the notification asked ADs to bring the content of this circular to the notice of all concerned. Another senior BB official said all arrangements for using the Chinese currency in international transactions at were already in place. The addition of yuan means that Bangladesh and China would now be able to dwindle dependency on U.S. dollars for China-Bangladesh projects also, said the official on condition of anonymity. He said several banks in Bangladesh maintain onshore yuan nostro accounts in China. In terms of regulations in Bangladesh, according to the official, yuan is on a par with other international currencies such as dollar, euro and Japanese yen. Nurul Amin , former chairman of Association of Bankers, Bangladesh (ABB), foresees that yuan denominated trade with China will bolster Bangladesh ties with it’s largest trade partner. The veteran Bangladeshi banker who held top management positions at two banks told Xinhua that this would ease dependency over the U.S. dollar in LC (letter of credit) opening for imports and help Bangladeshi and Chinese businesses to lower extra costs that arise due to exchange of currency from Chinese yuan to the US dollar and then to Bangladeshi currency taka. “We’re very glad because a long-pending demand of bankers finally fulfilled,” he said, adding that China’s yuan is now the global currency. Pakistan in January this year allowed the Chinese yuan for imports, exports and financing transactions for bilateral trade and investment activities. Asia’s third largest economy India had earlier reportedly relaxed its overseas borrowing rules allowing firms to raise Chinese yuan-denominated debt and raising the borrowing limit for companies in an attempt to woo capital inflows amid heightened global uncertainty. In October 2016, yuan became the fifth currency of International Monetary Fund’s special drawing rights (SDR) basket, which determines currencies that countries can receive as part of IMF loans. A recent Chinese central bank assessment reveals the yuan ranked the sixth globally as an international payment currency by 2017, and more than a quarter of cross-border trade was settled in yuan. More than 60 foreign countries have already adopted the yuan as their reserve currency. Enditem |