Legal Advice Seeks To Transfer Bangladesh Foreign Exchange Reserves From US Bank

Euro, Hong Kong dollar, US dollar, Japanese yen, Chinese pound and 100 yuan banknotes are seen in this illustration, January 21, 2016 Reuters

A Supreme Court lawyer served the notice in response to recent US sanctions against RAB officials, suggesting that Bangladesh uses different currencies such as GBP, EURO, RMB and INR for foreign transactions.

The governor of the Bangladesh Bank has received a formal notice, alongside the secretaries for finance and foreign affairs, asking that Bangladesh deposit its foreign exchange reserves with banks other than the United States to avoid sanctions.

The necessary measures should be taken to secure the reserves by transferring those of the US Federal Reserve to any other “safe” country or country, the legal opinion published Monday by Supreme Court attorney Md Mahmudul Hasan read.

In addition, authorities were advised to avoid using the USD as the country’s sole currency for foreign transactions, and urged to take the necessary action within 30 days from the date of receipt of the notice.

Otherwise, a brief motion will be filed with the High Court against the respondents, the notice said.

The lawyer made the requests in response to recent US sanctions against officials of the Rapid Action Battalion (RAB) for alleged human rights violations.

Read also – US sanctions RAB, seven of its officials

Calling the sanctions “a matter of international politics and conspiracy,” the advisory said in the near future Bangladesh’s foreign exchange reserves deposited with the US Federal Reserve could be frozen or frozen.

Thus, as a preventive measure, it is important to secure Bangladesh’s foreign exchange reserves; otherwise, the people of Bangladesh could suffer irreparable loss and suffering, the opinion adds.

The advice suggested that Bangladesh avoid the US dollar as the single currency for foreign transactions. “Recipients of notices should use different currencies such as GBP, EURO, RMB, INR for our foreign transactions and also maintain a sufficient gold reserve,” he argues.

But Bangladesh would need to maintain a minimum amount of foreign reserves in the US Federal Reserve to continue its regular business activities.

According to data from the Bangladesh Bank, reserves stood at $ 45.80 billion on Tuesday.

Additionally, Bangladeshis working abroad are expected to send huge sums of money home over the next three fiscal years, helping the country’s foreign exchange reserve reach $ 53.99 billion by mid-FY24. .

The government is forecasting an increase of more than 12%, on average, in remittances – the main driver of the country’s economy of more than $ 409 billion – over the next three fiscal years, including the current one.

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