FEPD Letter FEPD(A&NFBP)/101/2020-2940: Updates on foreign exchange transactions

50119 Foreign Exchange Policy Department Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh.

Ref: FEPD(ASNFBP)/101/2020-2940 Date: 17 June, 2020

Managing Director/Chief Executive All Approved Dealer Banks Head Office/Principal Office Dhaka.

Dear Sir,

Context: Updates on foreign exchange transactions.

You are certainly aware that in the 1990s of the last century, through the declaration of current account convertibility, the system of foreign exchange transactions moved from a controlled state towards liberalization. This continuity is ongoing, and necessary directions are being issued to Approved Dealer Banks via circulars/circular letters regarding transactions that require periodic review.

2. Your banks are playing a leading role in both the stable and dynamic sectors of the country's economy. It has been observed recently that Approved Dealer Banks are providing misleading information to customers without informing them about the updated status of the foreign exchange transaction system. It is even being stated that Bangladesh Bank approval is required for authorized transactions.

3. All concerned are aware that foreign exchange transactions are an inseparable part of the country's existing economic system. Through foreign exchange transactions, the country's economy is linked with the global economy, thereby opening the door for foreign investment in this country. The role of the banking system and those associated with it is undeniable. However, if the current foreign exchange transaction system is presented to customers/foreign investors as 'controlled', the economy may face threats despite the adoption of liberalization processes, which could create obstacles in overall economic progress.

4. In this context, all officers associated with foreign exchange transactions are requested to be informed about the current status of the existing liberal foreign exchange transaction system and periodic changes regarding it, and to take necessary measures to inform customers/foreign investors and provide cooperation to all relevant parties accordingly.

Yours faithfully,

(Signature)

(Md. Humayun Kabir) Executive Director Phone: 9530413

Phone: 88-02-9550448, 9554896, IP: 88-02-55685001-6, Fax: 88-02-9530479, www.bb.org.bd