Dhaka: Out of the loan taken from Russia for the construction of Rooppur nuclear power plant, Bangladesh will repay the amount of 318 million dollars using the Chinese currency Yuan.
According to the sources of the Ministry of Finance of Bangladesh, Bangladesh is going to do this international transaction by bypassing the US dollar in the transaction with Russia in the context of economic sanctions.
This was revealed by American media Washington Post in a report.
Uttam Kumar Karmakar, head of the European affairs section of the Ministry of Finance, told the Washington Post that a decision was taken to use the Chinese currency yuan at a meeting of the Economic Relations Department of the Bangladeshi Ministry of Finance on Thursday (April 13).
Citing the diplomatic sensitivity of the matter, Uttam Kumar Karmkar said that although the decision to repay the loan in Chinese currency has been taken, the transaction is yet to be completed as the payment details are yet to be worked out.
With this decision, the payment impasse between Bangladesh and Russia that has been going on for more than a year has been resolved. Bangladesh has been unable to pay Russia for the power plant using dollars after Russian President Vladimir Putin banned the widely used money transfer system SWIFT in Russia last year.
Bangladesh will now repay a $12 billion loan taken from Russia to build a nuclear power plant in Rooppur using the Chinese currency yuan through the Cross-Border Interbank Payment System (CIPS).
A Chinese online news portal reported on Monday that paying for the project in the Chinese currency yuan would be the most likely option.
The majority of cross-border trade is denominated in dollars, leading the United States to impose sanctions on banking systems in countries such as Russia, Iran, the Taliban, and Afghanistan. But critics of the ban accuse the US government of weaponizing the greenback and undermining its global standing.
Bangladesh made the deal after other countries recently indicated that they would opt for Chinese currency yuan payments to avoid the need to use dollars.
Last March, Brazil said it would abandon the dollar for trade with China. The situation is seen by Chinese officials and state media as a step toward the gradual “de-dollarization” of the world and the eventual decline of American hegemony.
Chinese President Xi Jinping is also pressuring Gulf countries, including Saudi Arabia, to accept the Chinese currency yuan for oil. Oil is an essential commodity that has been priced almost exclusively in dollars for decades. A small part of the trade is transacted in the Chinese currency Yuan.
Payment for Bangladesh’s nuclear power plant in yuan could pave the way for the resumption of business as usual between Russia and Bangladesh. Trade between Russia and Bangladesh had been paralyzed since the invasion of Ukraine. Experts and officials say one of the main reasons for the deterioration of trade relations was the lack of a payment system.
Last year, China offered Bangladesh a currency swap in the face of payment problem. As a result, a portion of Bangladeshi Bank was allowed to settle contracts with China in yuan.
However, Central Bank of Bangladesh spokesperson Majbaul Haq refused to confirm or deny the decision to pay Russia in yuan.
When contacted over the phone, the spokesperson of the Central Bank of Bangladesh said that the yuan is one of our official currencies. We also have some part of it in our foreign exchange reserves. This can be an option.
