Use local currencies in cross-border trade: ACU

The board of directors of the Asian Clearing Union (ACU) has advised its member countries to examine the possibility of using domestic currencies to facilitate cross-border payments.

The recommendation comes at a time when most countries wanted to reduce the use of the US dollar in international trade.

The ACU made the recommendation at its standing technical committee meeting in Dhaka on May 29, according to a press release. 

The meeting was part of the two-day meeting of the board of the ACU, which began on the same day.

Bangladesh Bank governor Abdur Rouf Talukder, also the chairman of the ACU for 2024, presided over the meeting.

Tehran-headquartered ACU has nine members: Bangladesh, India, Bhutan, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.

The representatives from the member countries were present at the meeting. Those from Myanmar and Pakistan central banks attended it virtually.

The board recommended examining the possibility of launching the ACU central bank digital currencies to facilitate cross-border payments, the risk of using domestic currencies in the ACU mechanism, and the risk of emerging issues, including the linkage of the payment systems.

The meeting also decided to hold a special discussion on utilizing local currencies in the next meeting.