Bangladesh is likely to propose addition of Japanese yen (JPY) as the third currency to the basket of the Asian Clearing Union (ACU) aiming to facilitate payment among its member countries for eligible transactions, officials said.
Presently, US Dollar and EURO (EUR) are being used for payment among the member countries
Some transactions between Bangladesh and Iran remain incomplete due to a US sanction on Iran.
Banking transactions were not being made with Iran, although Bangladesh has dollar and EURO accounts with the country under the ACU mechanism, a BB source said.
The next Board of Directors meeting of the ACU would be held in July next in Sri-Lanka, where the inclusion of JPY in the ACU basket will come up for discussion, he added.
Banking transactions would be easier further between the two countries alongside other ACU member countries, if the JPY is added to the ACU currency basket like EURO and dollar, he also said.
Finance Minister AMA Muhith and Iranian ambassador to Dhaka Abbas Vaezi met last year where they discussed different bilateral issues, especially problems with banking transactions faced by the two countries.
At the meeting, the minister assured Vaezi of taking necessary steps to resolve various existing problems.
The finance minister also gave assurance about his support for including JPY as the third currency in the ACU basket.
Presently, Bangladeshi banks cannot establish corresponding banking directly with the Islamic republic due to a US sanction on Iran.
As a result, export and import between the two Asian countries have decreased significantly.
Currently, exports and imports between the two Muslim countries are taking place through a third country, a high official of the BB said.
Banking transaction would be easier with the Islamic state. The volume of trade between the two countries will increase may times if JPY is accepted by the ACU as the third currency, he said.
Currently, there are nine central banks under the ACU system. They are: Bangladesh Bank, Royal Monetary Authority of Bhutan, Reserve Bank of India, Central Bank of the Islamic Republic of Iran, Maldives Monetary Authority, Central Bank of Myanmar, Nepal Rastra Bank, State Bank of Pakistan and Central Bank of Sri Lanka
ACU is a payment arrangement whereby the participants settle payments for intra-regional trade among the participating central banks on a net multilateral basis.
In February last total transactions channelled through the ACU amounted to US$ 984.00 million, posting a fall of 8.44 per cent from that of January, the previous month.
In comparison with the corresponding figure of last year, there is a growth of 11.39 per cent, according to the monthly newsletter of the ACU.
The main objectives of the clearing union are to facilitate payments among the member countries for eligible transactions, thereby economising on the use of foreign exchange reserves and transfer costs, as well as promoting trade and banking relations among the participating countries.
The Asian Clearing Union, established in 1974 under the auspices of UNESCAP (United Nations Economic and Social Commission for Asia and the Pacific), began its operation in November, 1975.