Neighboring country will start foreign trade in rupees from India, two banks opened Nostro account
Bangladesh will start rupee trade with India: Bangladesh may soon start foreign trade with India in rupees. Its formal announcement can be made on 11 July. This will benefit the economies of both countries. The cost of cross-border transactions between the two countries will also come down. This decision has been taken by Bangladesh to reduce the burden on foreign exchange reserves.
India's foreign trade in rupees seems to be getting support from the neighboring country Bangladesh. Two Bangladeshi banks plan to launch overseas trading in Indian rupees. Its objective is to depend on the dollar and increase its foreign exchange reserves. At present, foreign trade between India and Bangladesh is done in dollars only.
Nostro account has been opened by Eastern Bank in State Bank of India and ICICI Bank. A similar step has been taken by the government bank Sonali Bank.
A Nostro account is an account that a bank opens in another country's bank in that country's currency. Such accounts are used to conduct foreign trade.
Talking to news agency PTI on the issue of starting foreign trade from India in rupees, Afzal Karim, director of Sonali Bank, said that this is only the beginning. Some more banks will also join in the coming time. This will reduce the pressure on the country's foreign exchange reserves.
Ali Reza Iftikhar, managing director of Eastern Bank, said that a formal announcement of the same would be made on July 11. Cross-border transactions of India-Bangladesh foreign trade in rupees will become more convenient and cost-effective. Along with this, the economy of both countries will get a boost.
Bangladesh is facing a constant dollar shortage after Russia and Ukraine war. Due to this, its foreign exchange reserves have touched a seven-year low of $ 31.60 billion. Because of this, the currency of Bangladesh is also continuously falling.
Bangladesh imports the most from India after China. From the beginning of last year till June 2022, Bangladesh imported $13.69 billion from India, while India imported $2 billion from Bangladesh.
