The country's leading lender State Bank of India has asked exporters to avoid settling deals with Bangladesh in the dollar and other major currencies as it looks to curb exposure to Dhaka's falling reserves, according to an internal document and a source.
Bangladesh's $ 416-billion economy is battling rising prices of energy and food as the Russia-Ukraine conflict widens its current account deficit, and dwindling foreign exchange forces it to turn to global lenders such as the International Monetary Fund (IMF).
"The country is facing a shortage of foreign currency due to higher import bills and weaknesses of Bangladeshi taka against the dollar in recent times," the SBI said in a 24 August letter sent to its branches. The letter and its contents have not previously been reported.
The decision not to increase exposure to the dollar and other foreign currencies in relation to Bangladesh stemmed from the current economic situatio...
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