Bangladesh Paid $487 Million For Asian Clearing Union Payment

Dhaka, Bangladesh (AHN) - Bangladesh has made a routine payment of $487 million to the Asian Clearing Union (ACU) against imports during September-October this year, central bank officials told AHN Media on Wednesday.

The payment pushed the foreign exchange reserve down to $9.10 billion on the day from $9.56 billion of the previous day, they confirmed.

"We've remitted the fund to the ACU headquarters in Tehran in line with the existing provision of the eight-member union,' a senior official of the Bangladesh Bank (BB), the country's central bank, told AHN in Dhaka.

Under the existing provisions, outstanding import bills and interest accruing against thereof are settled at the end of every two months among the member countries.

During July-August period of 2009, payments to ACU against imports stood at $522 million indicating that imports were lower during September-October period in terms of value, the BB official added.

"India is our main trading partner under the ACU arrangement," he said, adding that Bangladesh imported different commodities including consumer items from India.

The ACU is an arrangement among Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka through which intra-regional transactions among the participating central banks are settled on a multilateral basis.

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

However, Bhutan joined the ACU on Dec. 9, 1999.

AHN Editor Linda Young's note: Beginning on Jan. 1, ACU participant nations were given the option of settling their transactions either in ACU Dollar (which equals $1) or ACU Euro (which equals one Euro).  This arrangement allows exporters to Iran, and importers of Iranian goods, to settle payment for import-export transactions without violating the United States-imposed ban on making payments to Iranian exporters or receiving payments from Iranian importers by sidestepping the U.S. banking system in such transactions. Iran is a major trading partner with many nations around the world - especially developing nations. ACU is headquartered in Tehran, Iran.