Revolutionizing Trade: Bangladesh Introduces Counter-Trade for Foreign Exchange Independence

According to the circular, traders are now empowered to engage in import and export transactions through innovative counter-trade arrangements, eliminating the need for foreign currency payments. Counter-trade, a distinct approach to international trade, involves the exchange of goods or services instead of relying solely on cash transactions. This reciprocal agreement, often observed between countries with limited foreign currency reserves, presents a unique opportunity for Bangladeshi exporters, importers, and traders to voluntarily participate in transactions where goods exported from Bangladesh are exchanged for goods imported from abroad. This initiative is poised to unlock the trade potential with previously untapped markets while mitigating foreign exchange losses within the country.

The directive stipulates that banks are authorized to establish and manage escrow accounts either in the name of foreign counterparts or jointly with Bangladeshi entities. These escrow accounts will serve as conduits for settling import payments through credits received from Bangladeshi importers, and export payments through debits to exporters against their export proceeds. To ensure the smooth operation of these accounts, Bangladeshi traders are encouraged to maintain communication with their counterparts, ensuring that the balances in the escrow accounts are regularly reconciled.

It is important to note that Bangladeshi traders must obtain prior approval from the Bangladesh Bank to open and maintain escrow accounts. However, the countertrade arrangement will not extend to transactions conducted through the Asian Clearing Union mechanism.