Bangladesh and India today launched settlement of bilateral trade in Indian rupee (INR), opening a new chapter of settling transactions in local currencies moving away from the American dollar and over-dependence on the greenback.

Two export letters of credit from Bangladesh"s two businesses — Tamim Agro and Shahjahan Mia — involving a total of 28 million Indian rupee and two import LCs involving 12 million Indian rupee by Nita Company and Abdul Matlub Ahmad were handed over by four participating banks — Sonali Bank, Eastern Bank of Bangladesh and India's State Bank of India and ICICI Bank — at the event at Le Méridien Dhaka.

Bangladesh Bank Governor Adbur Rouf Talukder, Senior Commerce Secretary Tapan Kanti Ghosh, Indian High Commissioner in Dhaka Pranay Verma were present among others at the event.

Bangladesh Bank and High Commission of India in Dhaka organised the programme to launch settlement of part of around $16 billion two-way trade in Indian rupee and reduce over reliance on dollar, cut cost and time in the growing trade between the two nations.

The move is likely extend some respite to importers as they will be able to open LCs by rupee instead of dollar. 

It is also expected to reduce pressure on Bangladesh's foreign exchange reserves, which have been falling since the amount of external payment continued to outpace receipts from exports and remittance.

Bangladeshi Taka lost value significantly over the last one-and-a-half years and the depreciation continues.