Ministry Of Trade Reminds Indonesian Entrepreneurs To Be Careful Trade Transactions With Bangladesh

JAKARTA - The Indonesian government through the Ministry of Trade (Kemendag) reminded Indonesian business actors to be careful in conducting trade transactions with Bangladesh.

Director of Export and Import Facilitation of the Ministry of Trade, Iskandar Panjaitan, said Bangladesh was experiencing problems in the economic sector after the resignation of Prime Minister Sheikh Hasina.

"We urge Indonesian business actors to be careful in transacting with institutions and individuals from Bangladesh," he said in an official statement, written Wednesday, September 11.

Iskandar said that this appeal was conveyed as a form of follow-up to the information submitted by the Indonesian Ambassador Dhaka through letter Number B-0019/Dhaka/240822 regarding the Development of Bangladesh's Economic Situation after the resignation of Prime Minister Sheikh Hasina and Anticipation of Banking Transactions.

The letter stated, continued Iskandar, Bangladesh is currently facing a liquidity crisis. The crisis was exacerbated by restrictions on cash withdrawals from Bangladesh's central bank, Bank Bangladesh.

In addition, this condition is accompanied by inflation which reached 11.66 percent and pressure on the highest currency exchange rate in the last 12 years. Meanwhile, from the energy sector, the Bangladesh Power Development Board (BPDB) is facing a debt burden of 45,000 US dollars or 4 billion US dollars. This is a critical issue for the newly formed interim government.

"We convey this to prevent losses that can be caused from banking transactions with Bangladesh due to the current political and economic conditions," he said.

For your information, currently Bangladesh Bank has issued instructions to nine banks not to serve check disbursements that exceed BDT 200,000 or USD 1,680.

The nine banks are Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, Bangladesh Commerce Bank, National Bank, Padma Bank, and ICB Islami Bank.

In addition, Bangladesh Bank set a cash withdrawal limit of BDT 200,000 or US$1,680 per account in one day. This is a precaution against the use of cash for illegal purposes.

"In response to these conditions, the Directorate of Export and Import Facilitation said, there are a number of anticipatory steps that Indonesian business actors can take," he said.

First, continued Iskandar, diversifying products, especially non-perishable products, and using a safe payment mechanism to avoid the risk of default or delaying payments.

Second, using adequate financial protection in export and import transaction agreements as well as the use of trusted banks in the transaction mechanism or Letter of Credit (L/C) payment.

"Third, if you continue to use L/C, Indonesian business actors need to ensure the use of trusted international banks that have branches in Bangladesh," he explained.

Fourth, for the energy sector, the Ministry of Trade urges Indonesian business actors to stop the planned transaction or cooperation with BPDB, which is currently in arrears in payments to private parties.

"In addition, there is a risk of delaying payments to Indonesian companies that have made transactions to support energy needs in Bangladesh," he said.