The decades-old hegemony of the dollar is being challenged in various parts of the world. Many countries are working seriously on finding an alternative to the dollar. Neighboring country Bangladesh is also making a similar preparation, due to which the value of Indian rupee is going to increase. Bangladesh is preparing to adopt the Indian rupee to reduce its dependence on the dollar.
Bangladesh banks open these accounts
According to a Bloomberg news, 2 banks are planning to do business transactions in Indian Rupees. For this, Eastern Bank of Bangladesh has also opened accounts in State Bank of India and ICICI Bank. According to Bloomberg’s report, Eastern Bank may make an announcement in this regard on July 11. Similarly, Sonali Bank, the state-run bank of Bangladesh, is also preparing to provide a similar service.
How did the dollar hegemony begin?
World War I and World War II made a big difference in the world map. made changes. These changes were not limited to geography only, but their impact was from economic world to culture. The biggest change that took place was the division of the world into two poles. America and the Soviet Union became the two new poles of the world. There was a prolonged tussle between the two, which is known in history as the Cold War. The Soviet Union disintegrated in the 1990s and the world became markedly unipolar after that.
This is how the dollar became the global currency
The changed world can be understood if If the whole world is considered as one country, America has got the same status as New Delhi in India and Beijing in China. America’s status as a global capital also created its cultural dominance and that’s why its currency dollar’s bullying also started. The situation has become such that the US dollar has become synonymous with the global currency.
Somebody buys and sells, America’s profit is fixed
Let’s understand it more simply. For example, let’s keep the trade of India and Bangladesh only. India exported wheat to Bangladesh. Now Bangladesh will pay India in return and this payment will be in dollars. For this, Bangladesh banks will need to buy dollars. Similarly, India took readymade clothes from Bangladesh. Now India will also need dollars for its payment. Means goods of India and Bangladesh, trade took place between India and Bangladesh, these two buyer-seller, but America also benefited in every deal. The reason… dollar dominance.
This is the trade of both the countries
Now preparations are on to break this dominance. Now if India and Bangladesh pay each other’s trade in rupees, then the dependence on the dollar will be reduced. The mutual trade of both the countries is currently worth 16 billion dollars i.e. about 1.33 lakh crore rupees. According to UN data, in 2021-22, India exported about $ 14 billion to Bangladesh, while Bangladesh exported $ 2 billion to India. The mutual trade of both the countries is going to grow very fast in the coming years. In such a situation, using the rupee instead of the dollar can provide a big relief to both the countries on the front of foreign exchange reserves. The report tells that the Central Bank of Bangladesh is making another preparation in this direction. The Bangladeshi Central Bank may launch a Taka-Rupee debit card in September. Under this, the people of Bangladesh will be able to spend an amount equal to 12 thousand dollars in Indian currency in a year under the travel quota in India. This will save the Central Bank of Bangladesh from double currency conversion and reduce its loss by 6%.
