The Bangladesh Bank has directed all commercial banks to introduce a foreign currency–Taka swap facility to help exporters meet their immediate liquidity needs without having to convert their foreign currency holdings.

In a circular issued on 3 November, the central bank’s Foreign Exchange Policy Department instructed Authorised Dealer (AD) banks to allow exporters to temporarily exchange foreign currency from their Exporters’ Retention Quota (ERQ) or 30-day pool accounts for local currency. Under this new mechanism, exporters can receive the equivalent value in Taka, with the settlement period capped at 30 days.

The circular stated that exporters must formally acknowledge their understanding of the contract terms, exchange rate implications, and any associated risks before entering into a swap arrangement. It further clarified that the maximum tenor of the swap will be 30 days, and all transactions must follow standard documentation and reporting procedures in line with international best practices.

According to Bangladesh Bank, the Taka obtained through the swap can only be used for export-related business expenses, such as production costs, transportation, or raw material purchases. The central bank emphasised that the funds must not be used for speculative or non-business purposes.

Officials believe that the newly introduced swap facility will enhance exporters’ cash flow by providing them with access to local currency while allowing them to retain their foreign exchange earnings. This move is also expected to ease pressure on the foreign exchange market, as exporters will no longer need to sell foreign currency prematurely to cover operational costs.

Bangladesh Bank reiterated that all swap activities must be recorded, verified, and reported in accordance with its existing procedures to ensure transparency and accountability within the financial system.