The New Nation - Internet Edition

Staff Reporter

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has suggested the member countries of Asian Clearing Union (ACU) to introduce Euro alongside the US dollar for settlement of payments among the eight-nations.

The Bangladesh Bank earlier sent a letter to the country's apex trade body with a request to give its opinion on switching over to multiple-currency transaction regime in ACU.

The ACU is an arrangement among Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka to settle payments for intra-regional transactions among the participating central banks on a multilateral basis.

The ACU is mulling over to go for multiple currency transaction and sought opinions of business bodies of the member countries through the respective central banks.

Before submitting the recommendation, the FBCCI discussed the issue with its member bodies and also with some leading businessmen, most of who preferred multi-currency.

"We have suggested the use of Euro along with the U.S. dollar with a view to helping the business communities in the ACU member countries," FBCCI president Mir Nasir told the New Nation.

"Multi-currency system is always better than single currency for making any business payment, he added.

A technical committee was formed under the leadership of the Central Bank of Sri Lanka to examine the use of a second currency in ACU transactions in line with the decision of 36th board of directors meeting, held in Dhaka on May 15.

"We will send a concrete proposal in this connection after examining all the proposals to the Central Bank of Sri Lanka," a BB senior official said. He also said the matter will be placed before the next board of directors meeting after its approval by the technical committee.

Central banks of the ACU member countries are the Reserve Bank of India (RBI), the State Bank of Pakistan (SBP), the Central Bank of Islamic Republic of Iran, the Bangladesh Bank, the Central Bank of Sri Lanka, the Central Bank of Myanmar, the Royal Monetary Authority of Bhutan and the Rastra Bank of Nepal.

The ACU started its operations in November 1975 to help boost trade relations among its member countries. Bangladesh and Myanmar joined the union as the sixth and the seventh members in 1976 and 1977 respectively. Bhutan joined the ACU in December 9, 1999.