Editorial, News & commercial office:
55/A, H M Siddique Mansion (Level-7), Purana Paltan, Motijhel C/A, Dhaka-1000. Phone: +8802226640056,
e-mail: [email protected], [email protected]
Bangladesh Bank (BB) has allowed Offshore Banking Units (OBUs) of scheduled commercial banks to undertake outright purchase and sale of foreign currency and cross-currency swap transactions with domestic banking units, other authorised dealers, other OBUs and other legitimate local counterparties.
The central bank issued the directive through a circular today to facilitate legitimate customer transactions, enhance foreign currency liquidity management, strengthen asset-liability management practices and align offshore banking operations with internationally accepted treasury practices.
According to the circular, such transactions may be undertaken when they are directly related to permissible customer transactions, funding requirements, settlement obligations, liquidity management, asset-liability management or foreign exchange risk management.
However, OBUs have been instructed to conduct the transactions in accordance with applicable foreign exchange regulations, prudential guidelines, approved internal policies, dealing and counterparty limits and sound risk management practices.
The transactions must not be undertaken for speculative foreign exchange trading purposes, it said.
Bangladesh Bank has also encouraged OBUs to adopt prudent foreign currency funding strategies, including accessing lower-cost currency funding where feasible.
They may arrange appropriate outright foreign exchange purchase or sale transactions or cross-currency swap arrangements to facilitate cost-effective trade settlement, efficient foreign currency liquidity management and effective mitigation of associated foreign exchange risks.
The central bank said the facilities are intended to enable OBUs to provide efficient services for permissible trade and financing activities, optimise foreign currency funding arrangements and manage currency exposures in line with internationally accepted market practices.
All other provisions of the Guidelines for Offshore Banking Operations issued through FE Circular No. 11 on January 30, 2025 will remain unchanged.
