Bangladesh Bank has launched a new regulatory framework allowing eligible cross-border trade transactions to be settled in Taka through Non-Resident Taka (NRT) vostro accounts.
According to a circular issued by the central bank on Wednesday, Authorized Dealer (AD) banks in Bangladesh can now open Taka vostro accounts for foreign correspondent banks without requiring initial deposits. Foreign buyers and importers can use these accounts to settle payments for Bangladeshi exports and permissible imports.
Under the new arrangement, trade contracts, letters of credit (LCs) and invoices will still be priced in convertible foreign currencies. However the invoiced amounts will be converted into Taka at prevailing market exchange rates for settlement via vostro accounts.
The mechanism also permits advance payments for trade while exporters receiving payment in Taka can retain foreign currency facilities to fulfill input import costs or service Export Development Fund (EDF) loans. Any surplus funds in these vostro accounts may be reinvested in Bangladesh through foreign direct investment, portfolio investments, mutual funds or remitted abroad under central bank guidelines.
Central bank officials noted that the policy creates an alternative payment channel alongside existing banking compliance rules. Industry experts expect the framework to reduce foreign exchange pressures, facilitate trade with key partner nations and gradually promote the international use of the Bangladeshi Taka.
