Bangladesh Bank has signaled support for expanding alternative international payment channels, opening the door for local banks to use China`s Cross-Border Interbank Payment System (CIPS) as part of efforts to diversify global trade transactions.
The issue came under discussion during a recent meeting between senior officials of the central bank and a Chinese delegation led by representatives of China`s state-owned Export-Import Bank.
Following the talks, Bangladesh Bank officials said there are currently no policy restrictions preventing commercial banks from joining the CIPS network if they choose to do so.
CIPS is China`s international payment infrastructure designed to facilitate cross-border transactions in yuan and is often viewed as an alternative to traditional global payment networks used in international banking.
The discussions also covered the possibility of raising funds through Panda bonds, a financing instrument that allows foreign entities to issue yuan-denominated bonds in China`s domestic capital market.
Central bank officials said broader access to international transaction platforms could create additional opportunities for trade and financial cooperation. They noted that participation in such systems would remain a commercial decision for individual banks.
The development comes at a time when many countries are exploring alternatives to heavy reliance on the US dollar for international transactions, particularly amid evolving geopolitical and financial dynamics.
China remains Bangladesh`s largest import source, with annual imports estimated at between $20 billion and $25 billion. Economists say settling part of this trade in Chinese currency could help reduce pressure on Bangladesh`s foreign exchange reserves and lower dependence on the dollar for bilateral transactions.
However, analysts caution that neither CIPS nor Panda bonds should be viewed as a standalone solution. They argue that the long-term benefits will depend on the future growth of Bangladesh-China trade, investment flows and broader financial cooperation between the two countries.
The discussions reflect Bangladesh`s growing interest in exploring new financing and payment options as it seeks greater flexibility in managing international trade and foreign currency transactions.
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