Allows foreign investors to keep foreign currency in their relevant account for a year

On June 21, 2023, the Central Bank of Bangladesh implemented a notable policy change by granting foreign investors the authorization to retain foreign currency within their respective accounts for a duration of one year. Previously, foreign currency received within the country necessitated conversion into the local currency (taka) and placement in a domestic currency account. Under the revised guidelines, approved dealers are now empowered to establish temporary foreign currency accounts in the names of companies or enterprises proposed by foreign investors.

This alteration allows the foreign currency to be utilized solely for outward payments related to capital expenditures or converted into taka. Notably, businesses can employ the funds in their foreign currency accounts to finance the procurement of capital machinery through the use of dollars. The tenure of these specialized accounts spans one year from the date of initiation, subject to immediate closure following the designated period upon the encashment of any remaining funds held within the account.

• Type:

  • Treatment and operation (Capital transfer and FOREX)

• Industry:

  • Not industry specific

• Sources:

  • Bangladesh bank, Foreign Exchange Policy Department Bangladesh Bank, https://www.bb.org.bd/mediaroom/circulars/fepd/jun212023fepd10e.pdf, 21 Jun 2023
  • thedailystar, BB eases rules for foreign investors, https://www.thedailystar.net/business/news/bb-eases-rules-foreign-investors-3352451, 21 Jun 2023
  • tbsnews, Foreign investors can now keep dollars in bank accounts for 1 year, https://www.tbsnews.net/economy/banking/foreign-investors-can-now-keep-dollars-bank-accounts-1-year-653946, 21 Jun 2023