India and Bangladesh may soon do away with dollar as the currency of exchange between two two South Asian neighbours. The development is expected to reduce the cost of trade as well as losses due to Rupee-Dollar and Taka-Dollar differences.
The latest bilateral deliberations between India and Bangladesh took place on the sidelines of the G20 finance chiefs meeting held in the southern Indian city of Bengaluru on February 24-25, Bangladesh’s Daily Star newspaper reported.
The report, while citing Prime Minister Sheikh Hasina government’s estimates, adds that every year, Bangladeshi nationals spend about $2 billion on treatment, tourism and education in India. India is among the top three import destinations for Bangladesh.
India-Bangladesh ties: Soon, a dual currency card may become a reality
For Indians and Bangladeshis visiting each other’s countries, they would have a dual currency card that they can load with Indian rupees or Bangladeshi Taka before travelling.
Reports in the Bangladeshi media say that the exchange rate would be derived from the two currencies and not be worked backwards from the exchange rate of the dollar.
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The Daily Star newspaper reported that the matter of Taka-Rupee bilateral exchange and dual currency card was brought up at a meeting of Bangladesh’s National Economic Council chaired by Prime Minister Sheikh Hasina
At the meeting, Bangladesh Bank Governor Abdur Rouf Talukder reportedly said that the move would also reduce the pressure on foreign currency given the large volume of payments to India.
“The pressure on reserves has come down a lot. The import bills have come down because of the measures taken. It is now possible to meet the import bills with the export proceeds and remittance inflows. But there are other dollar outflows that need to come down.”
The rollout will first take place on a test basis, before a formalisation of the process for the public by the public sector banks of the two countries.
(With inputs from agencies)
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