July 12: Bangladesh and India on Tuesday launched the trade transaction in Indian rupee in a bid to reduce their dependency on the US dollar and strengthen regional currency and trade.

For the first time, Bangladesh's bilateral trade with India was conducted  in the Indian rupee in addition to the US dollar.

Initially, the trade will be transacted in rupee and then gradually in Bangladeshi currency Taka upon the trade gap between the two countries decreasing, according to the central bank of Bangladesh.

The decision of doing trade in local currency has been taken as both neighboring countries face a dollar crisis.

The local currency-based trade was inaugurated at an event held in the capital Dhaka jointly organized by Bangladesh Bank and the Indian High Commission in Dhaka.

Banks in Bangladesh and India have been given permission to open nostro accounts, an account in a bank of another country for the purpose of foreign currency transactions.

Bangladesh Bank Governor Abdur Rouf Talukder and High Commissioner of India in Bangladesh Pranay Verma were present at the ceremony organized to launch the trade in India rupee.

The exchange rate will be determined in line with market demand and banks involved in the process, explained Amit Kumar, State Bank of India’s head of operation in Bangladesh.

(Agencies)