Standard Chartered Bangladesh says it has completed the first Indian rupee (INR) denominated trade transaction for Bangladesh's Walton Hi-Tech Industries to facilitate refrigerator and freezer exports to India. This is also the first Bangladeshi taka-INR (BDT-INR) export transaction for Bangladesh's electronics industry.

The transaction structure responds to continuing difficulties Bangladeshi firms are experiencing opening letters of credit (L/Cs) due to shortages of US dollars in the country, and underlines the global de-dollarisation movement that potentially challenges the dominance of the US dollar in the L/C market.

L/C difficulties

President of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI),

Mahbubul Alam, said this week that the country's businesses are finding it difficult to open L/Cs as they are unable to obtain US dollars at the BDT110 rate fixed by the Bangladesh Foreign Exchange Dealers Association and the Association of Bankers Bangladesh.

Although a number of importers are getting the dollar at the fixed rate, many others are being compelled to pay an additional amount to open L/Cs, Alam said at a meeting with Bangladesh Bank governor, Abdur Rouf Talukder, at the central bank headquarters earlier this week.

Currency diversification

StanChart's BDT-INR structure provides an alternative to offerings using traditional US-dollar denominated L/Cs that are becoming increasingly hard to come by, especially in emerging markets or for trade with countries including Iran and Russia that are heavily sanctioned by Washington.

Involving a seller in Bangladesh and a buyer in India, the financing of Walton's refrigerator and freezer exports was the first cross-border trade transaction for StanChart to have been settled in each nation's respective local currencies, which the bank sees as "opening up a new avenue for currency diversification."


The ability to offer INR payment options to Bangladeshi exporters selling into India allows them greater operational flexibility and simultaneously assists in both their and the country's overall export diversification objectives according to StanChart.

It says access to direct invoicing facilities in INR also results in reduced costs and savings.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.