The Bangladesh Bank approved a currency swap with the Bank of Russia on Thursday to make the payment method easier between the two central banks and promote bilateral business.
The central bank’s board of directors approved the deal in its 418th meeting, said Bangladesh Bank Executive Director and spokesperson Md Serajul Islam. BB Governor Fazle Kabir presided over the meeting while other board members and senior central bank officials were present.
“We are working for the currency swap agreement with the country since 2018 and BB approved it after a lengthy work with stakeholders,” a senior BB official said, declining to be named.
The currency swap agreement will increase the bilateral business between Bangladesh and Russia, he said.
Bilateral trade between the two countries increased considerably in the last few years. Bangladesh mainly exports apparel items, jute, frozen foods, tea, leather, home textiles and ceramic products to Russia. But there is massive scope for exporting seafood, potato and pharmaceutical products in Russian markets.
The country’s imports from Russia include cereals, minerals, chemical products, plastic products, metal, machinery and mechanical equipment. Russia can export capital machinery, fresh and dried fruits and raw sugar.
Credit guarantee scheme approved
The Bangladesh Bank board also approved a credit guarantee scheme for Tk 500 crore refinance schemes for small bank savers. They are -- Tk 10, Tk 50 and Tk 100 account holder beneficiaries’ marginal, landless farmers, low-income professionals and school banking account holders.
On September 5, the central bank formed Tk 500 crore refinance schemes for small bank savers.
The scheme’s tenure will be five years, and it will be provided from BB’s fund.
Tk 10, Tk 50 and Tk 100 account holder borrowers would be able to get loans from the fund at a 7 per cent interest rate.
The credit guarantee scheme will encourage banks to lend small bank savers affected by the Covid-19 pandemic.
The Bangladesh Bank also decided not to consider applications of three banks seeking exemptions from penalties given to them due to their submission of false CIB reports, lending to defaulted borrowers and others.
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