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Asian Clearing Union to give euro equality with dollar

Section: Daily Dispatches

By Siddique Islam
All Headline News, Palm Beach, Florida
Sunday, June 22, 2008

DHAKA, Bangladesh -- Central bank chiefs of the Asian Clearing Union (ACU) have agreed to introduce the euro alongside the U.S. dollar for settlement of payments among the member countries beginning January 2009.

The decision was made at the 37th meeting of the ACU board of directors, held in Nay Pyi Taw, administrative capital of Myanmar, on June 17-18, officials in Dhaka said today.

"The ACU board has agreed in principle to allow the euro as an alternative currency alongside the U.S. dollar from January 2009, aiming to make the payment system easier," the governor of the Bangladesh central bank, Salehuddin Ahmed, told AHN along with a group of reporters here after returning from Myanmar.

The central bank of Bangladesh chief led a two-member delegation at the board meeting.

The euro-U.S. dollar conversion rate will be fixed in line with the International Monetary Fund's special drawing right (SDR), the Bangladesh Bank governor added.

The board meeting also agreed on incentives to be provided by the commercial banks concerned with the balance of ACU dollar accounts to ensure sufficient funds in such accounts.

Central banks of the ACU member countries are the Reserve Bank of India, the State Bank of Pakistan, the Central Bank of the Islamic Republic of Iran, the Bangladesh Bank, the Central Bank of Sri Lanka, Central Bank of Myanmar, the Royal Monetary Authority of Bhutan, and Rastra Bank of Nepal.

The governors of the Central Bank of Sri Lanka and the Royal Monetary Authority of Bhutan have been elected chairman and vice chairman, respectively, of the eight-member ACU for 2009, the officials confirmed.

The ACU started its operations in November 1975 to help boost trade relations among its member countries. Bangladesh and Myanmar joined the forum as the sixth and seventh members in 1976 and 1977, respectively. Bhutan joined the ACU on Dec. 9, 1999.

The main objective of the clearing union is to promote trade among the member countries by making transactions easier, economizing foreign exchange reserves, and minimizing transfer costs.

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