Bangladesh Bank Governor Abdur Rouf Talukder, in a recent announcement, shared his strategy to enhance the country’s foreign-exchange reserves.
The proposed measures aim to simplify remittance transfers, leverage mobile applications and financial services, tackle trade mis-invoicing, and crack down on the prevalent illegal money transfer system known as hundi.
Governor Talukder expressed support for mobile financial services such as bKash and Nagad while encouraging banks to adopt mobile applications to facilitate seamless remittance transfers.
These initiatives, he believes, will bring about substantial changes in the inflow of remittances.
Speaking at the concluding session of a two-day research almanac organized by the Bangladesh Institute of Development Studies (BIDS) in Dhaka, the central bank governor emphasized the need to curb the demand for hundi. He underscored the efforts being made to combat under-invoicing.
He stated that their vigilant scrutiny of daily opened letters of credit has led to a 90% reduction in mis-invoicing in international trades.
Although imports have not experienced a significant decrease in quantity, their volume in US dollars has notably declined.
Governor Talukder highlighted the potential benefits of curbing hundi and streamlining the money-sending process, suggesting that an additional $2 billion in remittances could be received.
He also revealed plans to consolidate the multiple foreign exchange rates into a single rate within three to four months.
Regarding the financial account deficit and reserve erosion, he attributed it to local businesses swiftly repaying short-term external loans in US dollars due to the rising exchange rate.
The governor also acknowledged the need for effective measures to combat inflation and called for inclusive government policies to address the growing inequality in the country.
The discussion, moderated by Dr. Binayak Sen, Director General of the Bangladesh Institute of Development Studies (BIDS), featured other esteemed participants, including Dr. Mashiur Rahman, Economic Advisor to the Prime Minister, Dr. Shamsul Alam, State Minister for Planning, and Dr. Kazi Iqbal, Senior Research Fellow at BIDS.