Offshore banking units can buy, sell, swap forex more freely: BB

The Bangladesh Bank has allowed Offshore Banking Units (OBUs) to undertake outright purchase and sale of foreign currency and cross-currency swap transactions with other banks and eligible counterparties.
In a circular issued on Monday, the central bank said the move aims to facilitate legitimate customer transactions, improve foreign currency liquidity management, strengthen asset-liability management and align offshore banking operations with internationally accepted treasury practices.
Under the new arrangement, OBUs may undertake outright foreign currency purchase and sale and cross-currency swap transactions with their respective Domestic Banking Units (DBUs), other authorised dealers (ADs), other OBUs and other legitimate counterparties.
The transactions may be undertaken when directly related to permissible customer transactions, funding requirements, settlement obligations, foreign currency liquidity management, asset-liability management or foreign exchange risk management.

The facility will allow OBUs to access suitable foreign currency funding sources, optimise funding structures and manage currency exposures more efficiently, helping them provide financing at competitive costs, particularly for permissible trade financing.
Bangladesh Bank also encouraged OBUs to adopt prudent foreign currency funding strategies, including accessing lower-cost currency funding where feasible and using appropriate foreign exchange transactions or cross-currency swaps to manage associated risks.
The measure gives OBUs greater flexibility in managing foreign currency liquidity and funding costs, supporting more efficient offshore banking services and cost-effective financing for eligible trade activities.

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