Bangladesh Bank has allowed exporters to swap foreign currency holdings for local currency to ease short-term liquidity stress without converting export proceeds.
In a circular issued on Monday, the central bank asked all scheduled banks to offer exporters a foreign currency鈥揟aka swap facility using balances in their Exporters鈥� Retention Quota (ERQ) and 30-day foreign currency pool accounts.
Under the new arrangement, exporters can temporarily exchange their foreign currency鈥攕uch as US dollars or euros鈥攆or Taka through a swap deal with their banks and later reverse the transaction on maturity.
The swap, defined as a spot purchase of foreign currency against Taka with a simultaneous forward sale at an agreed rate and maturity, will not exceed 30 days for 30-day pools and will be settled on maturity.
The 鈥�30-day pool鈥� referred to an arrangement where exporters can maintain their repatriated foreign currency funds for up to 30 days before they are typically required to be converted into Taka or used for approved foreign currency payments.
The central bank in the circular said the facility aims to address exporters鈥� short-term cash flow needs while helping them retain their foreign currency earnings and avoid exchange losses from premature conversions.
The central bank further clarified that swap points or rate differentials between two currencies, may be set on market-reflective or cost-based interest/profit differentials between the two currencies.
Exporters can access the facility only against unencumbered balances in their own ERQ and pool accounts.
Authorized dealer (AD) banks are required to maintain strict internal risk, credit, and liquidity management systems to prevent misuse.
The arrangement must not be treated as a loan or financing facility, and funds obtained under the swap can only be used for genuine working capital purposes related to export operations鈥攏ot for speculative trading.
BB officials said that the move could relieve liquidity constraints faced by exporters amid a persistent dollar shortage and tight banking conditions.
The new system will also reduce reliance on conventional Taka-denominated export loans, allowing exporters more flexibility in managing their foreign currency holdings.
Officials said the policy aligns with Bangladesh Bank鈥檚 broader efforts to modernise the country鈥檚 foreign exchange management framework and strengthen exporters鈥� ability to operate amid exchange rate volatility.
All transactions under the facility must be properly documented and reported to the central bank following international best practices, the circular added.
