International Trade Finance and Role of Banks

[Pages:34]International Trade Finance and Role of Banks

Md. Ahsan Ullah

Executive Director Bangladesh Bank

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Outline

o Bangladesh o Policy for Int'l Trade o Regulations for Payment Settlement o Trade Transactions o Export Trade o Import trade o Trade with Myanmar o Investment in Myanmar o Looking Forward

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Bangladesh

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Policy for Int'l Trade

o Int'l trade is regulated by The Imports and Exports (Control) Act, 1950

o Under the provisions of this act, Government formulates policies ? Import Policy Order; and Export Policy.

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Regulations for Payment Settlement

o Settlement of payments against international trade is executed under Foreign Exchange Regulation Act, 1947

o BB, under the provisions of this act, formulates regulations in line with international trade regime

o Under the current account convertible regime since early nineties, payment against trade is fully convertible.

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FX regime - milestones

o Bangladesh Taka is convertible on current international transactions since 1994 in terms of Article VIII of the IMF Articles of Agreements.

o Floating exchange rate regime since 2003; before that fixed exchange rate regime existed.

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Export and import of Bangladesh

In Billion USD

45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000

40,611

15,511 13,301 12,053 10,412

36,571

32,527

33,309

33,576 29,765

31,198

19,481

20,291

21,388 22,592

23,989

26,567

14,151 15,581 16,233

5,000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15p

Export Import

Both export and import are showing the increasing trend. In fiscal year 2014-2015, export has been recorded at USD 31.2 bn where the

import is USD 40.6 bn

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Trade transactions

o Bangladesh is following international practice in conducting trade transactions

o Documentary collection under contracts is increasing but major transactions are still on Letter of Credit.

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