Iran, Bangladesh seek special payment channel to skirt dollar transactions

The South East Asian country is the world’s larges exporter of kenaf, widely used in global textile industry. However, the product’s exports to Iran have seen a sharp fall since the US reimposed sanctions on Iran last November. Two countries are looking to circumvent dollar in their financial dealings.

18 March 2019
ID : 11895
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The South East Asian country is the world’s larges exporter of kenaf, widely used in global textile industry. However, the product’s exports to Iran have seen a sharp fall since the US reimposed sanctions on Iran last November. Two countries are looking to circumvent dollar in their financial dealings.

Bangladesh Embassy Commercial Councilor Sobur Hossain attends meeting with representatives of mechanised carpert-weaving factories in the Iranian city of Kashan. (Photo: Iran Chamber Newsroom)

Iran and Bangladesh need to seek way to resolve obstacles in their banking ties in a bid to augment their trade volume to pre-sanctions figure of 100 million dollars.

“A big part of problems in our trade exchanges of kenaf can be resolved through the Bangladesh commercial attaché in Iran,” said Mahmoud Tavalaei, President of Kashan Chamber of Commerce, Industries, Mines and Agriculture (KCCIMA), addressing a meeting with Iranian importers of textile raw materials at the entity’s headquarters on Sunday.

“Other problems in the way of importing this product should be resolved by officials especially Bangladeshi banks,” he added.

Kashan, in the central Isfahan Province, is the hub of Iran’s mechanised carpet-weaving factories that have been affected by the reimposition of secondary US sanctions on Iran last November. These companies keep importing Bangladeshi kenaf but at a much higher cost.

“This region is considered an important hub for producing mechanised carpets as well as an importer of kenaf,” Tavalaei said.

Kenaf is cultivated mostly in southeast Asia for its fiber. The Bangladeshi kenaf is considered to have a higher quality which combined with cheap labour force has turned the South East Asian country a textile hub where many multinational companies make their products to be used in Europe or the Americas.

82% of Bangladesh exports of up to 37 billion dollars are clothes and the rest are textile raw materials, fruit, tea and chemical products.

Bangladesh is the largest world exporter of kenaf and this can be good reason for a rise in bilateral trade, according to Kashan Chamber of Commerce president.

The unilateral US sanctions caused a sharp fall of 60% in Iran-Bangladesh trade volume, Tavalaei stressed. “We are keen on reviewing the problems and find a good solution for them,” he said.

“Establishing a payment channel between Iran and Bangladesh is an important issues that needs to be pursued,” Sobur Hossain, Commercial Counsellor at the Bangladeshi Embassy in Iran said, adding that “much of the problems in bilateral trade are due to financial transaction.”

Hossain also proposed that a delegation from Bangladeshi banks and kenaf exporters travel to Kashan to hold talks with mechanised carpet-weaving factories to find solutions for problems.

The official proposed that Iranian mechanised carpet producers launch factories in his country, saying there are good exemptions for investors.

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