BB eases foreign currency rules for exporters in specialised zones

Bangladesh Bank has relaxed the foreign currency rules for exporters in specialised zones like Export Processing Zones (EPZs), Private Export Processing Zones (PEPZs), Economic Zones, and High-Tech Parks to retain foreign currency.

This move is aimed at simplifying foreign exchange management and streamlining transactions for these businesses.

The central bank issued a circular on Sunday, saying that Type B and Type C factories within these zones can now hold their export earnings in a foreign currency account until their back-to-back import liabilities are settled.

The foreign currency can be divided into two portions: one for back-to-back import payments and another for the value addition portion of local production.

The local value addition portion can be held as dollars for a maximum of 30 days. If the funds are not spent within this period, they can be transferred to another bank to cover the company's import liabilities.

After 30 days, any unused dollars must be converted into Bangladeshi Taka. The remaining balance - after converting 20 percent of total export earnings (or 25 percent for the garment sector) - can be held in the exporter's foreign currency account.

Exporters who do not use the back-to-back Letter of Credit (LC) facility can also hold dollars for up to 30 days for essential expenses. Any unused foreign currency must be converted into Taka after this period, following the same procedure.

According to industry insiders, this decision will enable exporters to conduct transactions more easily and manage their dollars more effectively. The new regulations are also expected to create a level playing field between exporters in specialized and general zones.