Members of eight-nation Asian Clearing Union (ACU) mull introducing multi-currency settlement options in the organisation’s transactions. The ACU countries now settle entire payments of external trade only through US dollar. Following recommendations of some members, the 36th board meeting of ACU, which began in Dhaka on May 15, formed a technical committee headed by Sri Lankan central bank chief to assess the possibility to introduce the multi-currency options.

The proposal of launching the multi-currency mode in the ACU came from Iran. Some other members also supported later. The ACU, basically a clearing and settlement organisation, was founded in 1974 with headquarters in Tehran. The two-day Dhaka meeting also suggested establishing a backup data centre of ACU. An alternative data centre will be made as a backup of existing centre, which is now located in Iran. The meeting also decided to work together to reduce trade gap among the ACU member countries. Dr Salehuddin Ahmed, governor of Bangladesh Bank and also chairman of ACU, presided over the meeting.

Yago Venugopal Reddy, governor of Reserve Bank of India, Ebrahim Sheibany, governor of the Central Bank of Islamic Republic of Iran, Ajith Nivard Leslie Cabraal, governor of the Central Bank of Sri Lanka, Bijaya Nath Bhatteria, governor of the Nepal Rastra Bank, U Than Nyein, governor of the Central Bank of Myanmar, Daw Tenzin, managing director of the Royal Monetary Authority of Bhutan, and Yaseen Anwar, deputy governor of the State Bank of Pakistan, were present at the meeting.

The meeting over, Salehuddin told journalists that some ACU members suggested allowing other currencies in addition to US dollar to settle their payments. “The newly formed technical committee on this issue will examine the possibility of introducing the multi-currency options in ACU transactions,” Salehuddin said. The board meeting also decided the Maldives and Afghanistan will be the new members of ACU by 2008. The ACU board will also invite some central Asian and CIS countries to become members of the organisation.

Bangladesh is the major importer in the ACU region. In 2006, Bangladesh imported 17.7percent of total imports in the ACU region, while it exported only 1.2percent of total exports. Salehuddin said the respective governments of the ACU countries can come forward to reduce the trade gap by implementing bilateral and multilateral agreements.

The objectives of ACU include multilateral settlement of current account payments, conservation of forex, promotion of monitory cooperation among central banks, increasing relationship among banking system of member-countries and providing currency swap arrangements. The annual board meeting of the ACU is hosted by member countries in rotation. The ACU transactions are growing since 1975 and it has not registered any defaulters so far. The central banks of the eight member countries, not their governments, are involved in its operations. Salehuddin Ahmed, governor of Bangladesh Bank and chairman of Asian Clearing Union (ACU), speaks at the 36th board meeting of the organisation that began in Dhaka on May 15.