Business Report :
The Bangladesh Bank has introduced a new facility allowing exporters to temporarily exchange their retained foreign currency earnings for taka to meet urgent cash needs, without converting them.
In a circular issued Monday, the central bank’s Foreign Exchange Policy Department instructed all commercial banks to offer this foreign currency-taka swap service to exporters holding funds in their Exporters’ Retention Quota (ERQ) accounts.
Under this mechanism, exporters will be able to swap foreign currency such as US dollars or euros for taka, and later reverse the transaction within a 30-day period. The swap will be conducted by Authorised Dealer (AD) banks based on exporters’ balances in their ERQ and 30-day pool accounts.
According to the circular, the swap rate also called the swap point will be determined based on the difference in interest rates between the two currencies.
Not a Loan, But a Temporary Exchange
Bangladesh Bank clarified that the arrangement is not a loan or financing tool, but a temporary currency exchange. Banks must ensure proper risk management, liquidity monitoring, and internal audit procedures when conducting such transactions.
Exporters will be required to formally acknowledge their understanding of the contract terms, exchange rate effects, and any associated risks before entering into the agreement.
Funds Must Be Used for Export Purposes
The central bank also emphasised that the taka obtained through the swap can only be used for export-related purposes, such as production costs, transportation, or raw material purchases. The funds cannot be used for speculative trading or non-business purposes.
Officials at Bangladesh Bank said the initiative is designed to ease exporters’ short-term liquidity pressure and help them manage cash flow more efficiently. The facility will allow businesses to access local currency quickly without selling their foreign earnings, which may also help reduce pressure on the dollar market.
All swap transactions must be properly documented, recorded following international best practices, and reported to the central bank as part of regular procedures, the circular added.
