RMB instead of US$ advised for Sino-BD trade transaction

Bankers from Bangladesh and China suggested introduction of transaction in RMB (Chinese Yuan) instead of US Dollar for International Trade between the two countries. This will help in reducing cost of production and price volatility due to changing exchange rates of US Dollar between Bangladesh and Chinese currencies. It will also save additional costs as this will involve two currencies instead of three.

This was suggested by the participants during a day-long Seminar on Bangladesh China Trade Finance : Role of Banks in Kunming, China last Friday ( 21 August). A total 45 senior Photo Final for Press-editedlevel officials, including Bangladesh Bank Executive Director, MDs/CEOs, DMDs from Bangladesh Bank and 18 Commercial Banks of Bangladesh as well as 60 bankers from Commercial Banks of China attended the Seminar.

ICC Bangladesh President Mahbubur Rahman inaugurated the Seminar organized by International Chamber of Commerce (ICC) – Bangladesh, The world business organization jointly with ICC China and China Council for the Promotion of International Trade (CCPIT). He mentioned that currently China is Bangladesh’s largest trading partner. In fiscal 2013-14, trade volume between the two countries stood at around $8.29 billion. The trade balance is heavily tilted in favour of the Asian giant while Bangladesh importing goods worth $7.54 billion and exporting goods worth $746.2 million.

As Bangladesh suffers a huge trade imbalance with China, the Bangladesh government has taken a progressive move to bridge the widening gap between the two countries and has taken initiative to boost exports to China over the next five years. In this regard, a pavilion is likely to be set up at Beijing in China and export of eel fish and leather products may increase further. Besides, the government will open commercial wing at different important locations in China including Kunming, he observed.

The Seminar moderated by ICC Bangladesh Commission Chairman Muhammad A (Rumee) Ali also suggested formation of a sub-committee by the Bankers of Bangladesh and China to sort out various issues for furtherance of trade between the two countries.

The inaugural session moderated by Mrs. Tan Yun, Director, Secretariat of China-South Asia Expo & Vice Secretary General of Yunnan Sub-council of CCPIT was also addressed by ICC China Executive Director Zhao Zhenge, Bangladesh Bank Executive Director Md. Ahsan Ullah and ICC Bangladesh Secretary General Ataur Rahman.

Bangladesh Bank Executive Director presented a paper on Bangladesh Foreign Exchange Regulations for International Trade Finance and Role of Bangladesh Bank in settlement of disputes related to L/C payments while Ms. Deng Xiaoquan, Senior Manager, Bank of China presented paper on General Practice of International Trade Settlement in China.

The Seminar was also addressed by Managing Director & CEO, Eastern Bank Limited & Chairman, Association of Bankers Bangladesh Ali Reza MD Iftekhar; Mutual Trust Bank Managing Director & CEO and Chairperson of SWIFT & User Group of Bangladesh Anis A. Khan; Standard Chartered Bank Bangladesh CEO Abrar A. Anwar and Social Islami Bank Managing Director Md. Shafiqur Rahman.

Manager of International Trade Processing Center of Industrial and Commercial Bank of China Ms. Ren Lixia; Senior International Settlement Manager, International Settlement Center, Bank of Communications Co. Ltd. Mr Chen Haojia; Prime Bank Deputy Managing Director & Chief Business Office Mr. Ahmed Shaheen and Deputy Managing Director, International Banking Wing of Islami Bank Bangladesh Ltd. Mr. Abdus Sadeque Bhuiyan presented few cases from China and Bangladesh regarding settlement of payments. Sonali Bank Deputy Managing Director Md. Ataur Rahman Prodhan and AB Bank Deputy Managing Director & Head of Credit Moshiur Rahman Chowdhury commented on cases.

Head of RMB Products, Transaction Banking, Standard Chartered Bank Hong Kong Frankie Shu On Au presented a paper on RMB Internationalization Roadmap and Latest Development.