BB issues consolidated circular on foreign exchange management, operations

The Bangladesh Bank (BB) on Thursday issued a consolidated circular on foreign exchange management and operations, bringing existing regulations and subsequent instructions into a single document to streamline foreign exchange activities.

Issued under Section 20(3) of the Foreign Exchange Regulation Act, 1947, the circular replaces existing instructions on foreign exchange management and operations set out in the Guidelines for Foreign Exchange Transactions (GFET), 2018, Volume 1, and subsequent circulars. However, monthly reporting instructions under GFET Volume 2 will remain in force.

The circular covers exchange rates and reporting, transactions between BB and authorised dealers (ADs), Asian Clearing Union (ACU) payment settlements, foreign currency accounts, open-position limits, nostro account reconciliation, forward dealings, swaps and commodity price risk hedging for imports. 

It also addresses restrictions on virtual assets and virtual currencies, including facilitating their exchange, transfer and trading.

The instructions will remain valid for one year from the date of issuance, with any subsequent instructions issued during this period to be read alongside the circular.

Industry insiders have welcomed the initiative, noting that consolidating previously fragmented instructions into a single document will make foreign exchange regulations easier to access, understand and follow, helping authorised dealers and other stakeholders navigate the regulatory framework more efficiently.