DHAKA/COLOMBO – Bangladesh Bank, the country’s central bank, has instructed state-owned and commercial banks to refrain from transactions with Sri Lanka through the Asian Clearing Union (ACU) system.
The central bank’s Foreign Exchange Policy Department issued a circular on Thursday (27) and sent it to top executives of banks.
The ACU is an arrangement through which participating countries settle import payments for intra-regional transactions.
Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka are members of ACU, which has headquarters in Tehran. The central banks of the countries have to make payments every two months.
If any Bangladeshi bank wants to settle a transaction with a Sri Lankan commercial bank, they can do it by ignoring the ACU system.
In a landmark gesture of sorts Bangladesh in March last year agreed to give Sri Lanka loans of at least US$ 200 million from its foreign exchange reserves under a currency swap deal.
Sri Lanka was due to make the repayment earlier this year, but Bangladesh extended the deadline for repayment to three instalments in February and March 2023, in light of the crippling economic crisis which had plagued Sri Lanka.
Earlier this month, Governor of the Bangladesh Central Bank, Abdur Rouf Talukder, said the country remains hopeful that Sri Lanka will repay the $200 million by March 2023.
– tbsnews.net/ENCL
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