Revised foreign currency retention restrictions eased for exporting companies within specialized zones by the central bank
In a significant move aimed at enhancing operational efficiency and foreign exchange management for industrial enterprises operating in Bangladesh's special economic zones, the Bangladesh Bank has revised the foreign currency retention rules for Type B and C enterprises.
The updated policy, effective from August 14, 2025, allows these enterprises to retain repatriated export proceeds in foreign currency accounts for legitimate business purposes, including settling import liabilities and making authorized payments abroad.
Key aspects of the new policy include:
- Foreign Currency Retention: Type B and C industrial enterprises in special economic zones (EPZs, PEPZs, EZs, HTPs) are now permitted to retain their repatriated export proceeds in foreign currency accounts.
- Use of Retained Funds: The retained funds can be utilised for import payments and other legitimate business purposes.
- Import Financing: Import financing is now allowed via short-term external borrowing and Letters of Credit (LC), Standby LCs (SBLC), or guarantees for import payments. The circular waives some guarantee requirements, easing foreign currency-related formalities.
- Imports without LCs: Commercial imports without LCs are allowed within prescribed limits on a documents-against-payment or usance basis (up to 60 days), providing further flexibility for import financing.
- Applicable Zones: The revised policy applies to EPZs, PEPZs, EZs, and HTPs.
These amendments represent an easing of foreign currency retention regulations aimed at encouraging exports and easing forex liquidity constraints for industrial enterprises operating in Bangladesh's special economic zones.
Exporters operating without back-to-back arrangements can retain proceeds in foreign currency for up to 30 days for permissible uses, such as transfers to other banks for import payments of related enterprises in specialised zones.
The changes aim to simplify operations for zone enterprises by aligning their retention facilities with those of non-specialised enterprises, thereby strengthening foreign currency liquidity management in specialised economic zones.
The circular was issued by the Bangladesh Bank today, reflecting the central bank's broader efforts to stabilize and support the forex market.
- The updated foreign currency retention rules by the Bangladesh Bank, effective from August 14, 2025, extend to the banking-and-insurance sector, as Type B and C industrial enterprises in special economic zones can now retain their export proceeds for settling finance-related matters abroad.
- In an effort to enhance financial efficiency and bolster foreign exchange management, the Bangladesh Bank's revised policy allows enterprises in special economic zones to use their retained foreign currency funds for finance, including import financing through short-term external borrowing and Letters of Credit.
