Use proper payment channel for imports from ACU member countries: BB to banks
Imports from ACU-member countries typically exceed exports, and Bangladesh pays $1-1.5 billion every two months to cover the trade imbalance
The Bangladesh Bank has instructed banks to ensure that payments for imported goods from the Asian Clearing Union (ACU) member countries are made through the ACU mechanism.
The directive was issued today (25 September) by the Foreign Exchange Policy Department of the central bank.
Along with Bangladesh, the ACU member countries include India, Iran, Nepal, Pakistan, Sri Lanka, Myanmar, Bhutan and the Maldives.
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The ACU is a payment arrangement whereby the participants settle payments for intra-regional transactions among the participating central banks on a net multilateral basis.
According to the directive, Paragraph 2, Chapter 3 of the Guidelines for Foreign Exchange Transactions-2018 outlines the operational procedures to settle payments for current account transactions using the ACU mechanism.
The directive also stated that banks were found using traditional payment mechanisms instead of the ACU system with ACU member countries.
The Foreign Exchange Policy Department in the directive advised the banks to discontinue the practice and strictly adhere to the ACU mechanism for their transactions.
According to senior central bank officials, Bangladesh, being an import-dependent country, benefits from settling payments through the ACU channel.
Typically, Bangladesh imports more from other ACU countries than it exports. So, as per the ACU system, every two months, Bangladesh makes payments of around $1-1.5 billion to cover the trade deficit between imports and exports.
This arrangement allows Bangladesh to hold onto this amount of dollars for nearly two months beyond the due date for import payments.
As a result, there is an opportunity to earn interest or invest those dollars during that period, the officials explained.
The officials further noted that as some banks have been bypassing the ACU mechanism for payments related to imports from ACU-member countries, opting for traditional payment methods instead, Bangladesh was missing out on the opportunity to hold and utilise these dollars.
To address this, the central bank issued the instructions to ensure that banks follow the proper payment procedures, they added.
