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Indian Ocean countries forum to propose currency swaps among member countries

The Business Standard
Tuesday November 22, 2022

IORA Council of Ministers Meeting will be held on 24 November in Dhaka

The Indian Ocean Rim Business Forum (IORBF) will send a proposal to introduce currency swaps among member countries of the Indian Ocean Rim Association (IORA) to handle the pressure on foreign exchange reserves, said IORBF Chairman Sheikh Fazle Fahim.

"Along with the current conventional way for cross-border trade, we are going to provide a proposal similar to the policy that Indonesia has taken on currency swaps," said Sheikh Fazle Fahim on the last day of the two-day leadership summit of IORBF in the capital.

"We are thinking of a long-term plan on how to mitigate the issue of reserves. At the same time, we are preparing to move forward, learning from the studies that Indonesia has done with South Korea, China and Japan," he added.

"The IORA Council of Ministers Meeting will be held on 24 November in Dhaka where the proposal will be submitted. There we will propose establishing a trade portal between IORA countries by prioritising products," Sheikh Fazle Fahim told The Business Standard.

Along with that, a proposal will be placed for food, energy and other agricultural and industrial products to assess what can be done with alternative trade financing – blockchain or currency swaps – using technology. Overall, IORA will place proposals for regional integration of value chains among countries, he added.

Sheikh Fazle hoped a regional integration value chain will be created between IORA countries if block chain or currency swaps are launched. This will create an opportunity for these countries to pay interest and principal in one currency.

And if this is the case, the pressure on foreign exchange reserves of the IORA member countries, including Bangladesh, will be very manageable, which will be placed in the meeting, he added.

Representatives of IORBF member countries present at the event, said the governments of the respective countries should take key initiatives to increase and facilitate trade and investment between these countries.

The 23 members of the IORA are Australia, Bangladesh, Comoros, French, India, Indonesia, Iran, Kenya, Madagascar, Malaysia, Maldives, Mauritius, Mozambique, Oman, Seychelles, Singapore, Somalia, South Africa, Sri Lanka, Tanzania, Thailand, United Arab Emirates, and Yemen.

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