A proposal to amend the foreign exchange regulation act is awaiting final approval of the government, Bangladesh Bank (BB) Governor Salehuddin Ahmed said on August 30.

“The central bank has already submitted a proposal on amendments to the Foreign Exchange Regulation Act 1947 to the ministry concerned aiming to facilitate the foreign trade,” BB governor told reporters after distributing certificates among 10 bankers, who have successfully completed the Certified Documentary Credit Specialist (CDCS) Examination, held in Dhaka on April 10 last.

The certificate distribution ceremony held at the Dhaka Chamber auditorium was organised by the International Chamber of Commerce (ICC) – Bangladesh with its President Mahbubur Rahman in the chair. Bangladesh was selected for the first time as one of the venues by Ifs School of Finance, a registered charity in corporate by Royal Charter in the United Kingdom and the International Chamber of Commerce (ICC) Headquarters in Paris for holding the CDCS Examination.

The interim government earlier sought a final draft report from the central bank on the amendments to the existing Foreign Exchange Regulation Act to make it time-relevant and ensure its effective implementation in line with international standards, officials said. The existing law was amended in 2002 to increase the period of punishment for violating foreign exchange rules and regulations up to four years from two years, they added.

Some neighbouring countries, including India, Pakistan and Sri Lanka, have already amended their foreign exchange rules and regulations in line with the international practices. “We have already relaxed some regulations relating to foreign exchange transactions to facilitate international trade,” the central bank chief said.

He also said the BB has relaxed the foreign exchange regulations recently relating to advance payment against imports and payment of freight charges to chartered ship owners abroad. Regarding inflationary pressures, the BB governor said the inflationary might ease after the holy month of Ramadan. He, however, feared some temporary rise in inflationary pressures during the Ramadan.

The country’s CPI inflation soared to 10.04 per cent on the point-to-point basis in June last from 7.44 per cent of the previous month, according to according to the Bangladesh Bureau of Statistics (BBS) data. He also said the prices of some essential items including pulses, edible oil and onion at import level have declined.

“The country’s external trade is maintaining a healthy trend at the moment,” Mr. Ahmed said, adding the central bank is allowing more imports to meet the growing demand for essential items in the local market during Ramadan. The BB governor congratulated the new CDCS experts and expressed his satisfaction over the rate of success of Bangladeshi participants, which is better than the global rate.

He also advised others banks to encourage their officials to sit for that examination. ICC Bangladesh President Mahbubur Rahman highly appreciated the existing monitory policy said that such an expansionary monetary policy would help support the country’s industry and production process.

On July 17 last, the central bank unveiled its sixth half-yearly monetary policy aiming to achieve maximum economic growth through expansion of credit to productive sectors for the current fiscal by keeping inflationary pressures under control. “Monetary tightening may be one of the instruments for coping with inflation but it is not necessarily the only option. A restrictive monetary policy hurts growth, which, in turn, hurts the interests of the poor,” Mr. Rahman noted.

He also lauded the efforts of the central bank to expand low-cost credit to small and medium enterprises (SMEs) and women entrepreneurs and housing loan to low income group. “We urge the BB governor to take alternative effective measures and pursue them vigorously to curb the inflation and keep it within a tolerable limit,” Mr. Rahman added.

He also appreciated another decision of the Bangladesh Bank to raise the capital base of all banks to Tk. 4.0 billion. As a result of this decision, he said, the banks and financial institutions would be in a better position to play a proactive role in the market. Mr. Rahman also said the ICC-Bangladesh is planning to organise training courses on foreign exchange dealings for the bankers.

He said the next CDCS Examination will be held on April 16, 2009 and banks can take the opportunity to send their executives to participate in the same. CDCS is an international standard qualification for documentary credit specialists. It is a professional certification that enables documentary credit practitioners to demonstrate specialised knowledge and application of skills required for competent practice.

The first ever examination in Dhaka was held on April 10, 2008. As many 12 bankers from two local and two foreign banks appeared at the examination and 10 came out successful. Of them, five were from the Eastern Bank Ltd., four from the Standard Chartered Bank Ltd and one from the One Bank Ltd. A total of 1876 candidates worldwide sat for the examination this year and the success rate was 70 per cent, according to the ICC-Bangladesh.

Chairman of the Banking Committee of ICCB Mamun Rashid said having 10 CDCS expert Bangladeshis would be able to handle international trade issues with diligence. He also said this is humble beginning would be a source of inspiration for others.

Among others, ICCB Vice President Latifur Rahman, former Presidents of Dhaka Chamber of Commerce and Industry (DCCI) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) MA Sattar, Barrister Rafique Ul Huq, ICCB Board Members ASM Quasem, Aftab ul Islam, R Maksud Khan and chief executive officers and managing directors of different banks also attended the programme.