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said, adding that Bangladesh was trying to secure rupee-linked loans from India to boost the two-way commerce.

The trade is being done through the lenders’ nostro accounts, which are essentially bank accounts held in another country by domestic banks and denominated in the currency of the overseas country.

Bangladeshi exporters are receiving their proceeds in rupees in those accounts and that balance is being used to pay for imports from India.

In short, import bills equivalent to export proceeds can be settled under the mechanism. The exchange rate used is market-determined.

A senior official of the central bank says similar applications are being scrutinised by six more banks: Trust Bank, Social Islami Bank, AB Bank, NCC Bank, Prime Bank, and Premier Bank.

Industry insiders say cutting reliance on the US dollar is not possible at present since around 90 percent of foreign trade is conducted through the global currency. Although the use of other currencies continues to rise, the growth is not fast.

“The US dollar is considered the most sustainable foreign currency in overseas trade,” said Mirza Elias Uddin Ahmed, managing director of Jamuna Bank, recently.

Unlike the US dollar, the value of other foreign currencies can fluctuate very quickly against the local currency. Therefore, the US dollar is the most trusted currency, he said.

This is not only the case for Bangladesh.

The oil ministry told a parliamentary standing committee that it had not found any takers to pay for the import of crude oil in the rupee as suppliers expressed concerns about the repatriation of funds and high transactional costs, according to the Press Trust of India.

In a bid to internationalise the Indian currency, the Reserve Bank of India on July 11, 2022, allowed importers to pay with the rupee and exporters to receive proceeds in the currency.