Cabinet discusses international payment offers outside of SWIFT

The firm on Monday discussed proposals for alternative international payment systems to SWIFT (Society for Worldwide Interbank Financial Telecommunication) amid growing appreciation of the US dollar in the local market.

“We are getting offers from Singapore and Hong Kong that they could settle international transactions for our imports and exports through the systems they have developed outside of SWIFT,” Khandker cabinet secretary Anwarul Islam said during a briefing. a press briefing at the Secretariat after the weekly cabinet meeting.

He said they offer services such as import and export payment settlements for Bangladesh beyond SWIFT.

Cabinet members, relevant secretaries and the Governor of Bangladesh Bank, among others, attended the meeting chaired by Prime Minister Sheikh Hasina at his office in Tejgaon.

The cabinet secretary, however, did not release the names of the companies or institutions that made the bids.

He said the cabinet meeting discussed the situation in the dollar market, but did not make any decisions on proposals for settling international transactions outside the SWIFT payment system.

Based in Belgium, SWIFT is a non-profit organization, created in 1973, which maintains a network for the international exchange of payment instructions between banks and other institutions.

The Bangladesh Bank on Sunday fixed the interbank exchange rate at Tk 89 per US dollar, further devaluing the local currency taka by 1.1 Tk from Tk 87.9 per US dollar based on bankers’ proposals.

Prior to the issuance of the directive, the Bangladesh Bankers Association and the Bangladesh Stockbrokers Association proposed that the interbank exchange rate be set at Tk 89.8 per US dollar.

Banks were charging importers up to Tk 97 per US dollar lately.

Recent instability in the dollar market prompted the BB to ask banks to offer an interbank exchange rate below Tk 90 per US dollar to deal with the situation and contain inflationary pressure.

Market instability has been the reason why banks have imposed a high rate on importers lately.

As the demand for dollars was high, many banks had to offer higher rates to exporters as well as shippers.

Even after the BB injected over $5.5 billion into the market, the dollar market has remained very volatile over the past two months.