'Iran sanctions will not hurt Bangladesh'

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Golam Mowla
Published : 04:00, May 18, 2018 | Updated : 00:16, May 22, 2018

Flags of Bangladesh and IranThe US sanctions against Iran will not hurt the Bangladesh economy as the South Asian country maintains no direct trade link to the Persian country, economists said.
They said Bangladesh can use European and Indian channel to trade with Iran as the alternative.
“We have nothing to worry because Bangladesh has no direct bilateral trade link to Iran,” said central bank official SK Sur Chowdhury.
Reuters news agency reports, the US Treasury imposed sanctions against six individuals and three companies of Iran two days after US President Donald Trump withdrew from the 2015 nuclear deal on May 8.
According to Chowdhury, the government was mulling to establish direct bilateral trade with the Islamic Republic since the US withdrew its sanctions on Iran in 2015.
“Everything was going well. But, the US has imposed bans on trading with Iran again. However, it will not hinder our progress,” said Chowdhury, who is also the Banking Reforms Adviser of Bangladesh Bank.
Sources said, Bangladesh had considered Iran as the transit to export several products including jute since US sanctions lifted. It exports jute yarn, which is used as ‘raw’ to Iran’s traditional carpet industry.
Data from Bangladesh Jute Spinners Association shows, Bangladesh exported 39,000 and 33,00 tonnes of jute yarn to Iran in 2015-16 and 2014-15 fiscals respectively.
Beside, a total of nine countries including Bangladesh and India established Asian Clearing Union (ACU), with headquarters in Tehran, in 1974 at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific to ensure regional cooperation.
“Amid the US sections, Bangladesh maintained trade relation with Iran under special arrangement,” said Atiur Rahman, a former governor of the central bank.
The member countries settle their export and import bill through ACU payment in every two month using dollar currency. Later, euro and Japanese yen are also included.
Rahman said, “Reserve Bank of India helped Bangladesh in making ACU payment during the previous sanctions.”
According to the economist, the European banks are more likely to take side to Iran despite the US ban.
He said, “All kinds of transaction will be possible through Indian and European banks. So, our economy will not be affected.”
“In that case, Bangladesh must maintain a strong diplomatic relation with India and Europe,” said Rahman, a winner of the GUSI Peace Prize International 2014.

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