Bangladesh Bank increases ERQ account limit

Bangladesh Bank has increased the limit of foreign currency deposit in Export Retention Quota (ERQ) account.

Bangladesh Bank Foreign Exchange Policy Department on Tuesday has said in a circular that ERQ account limit has been increased by 5 to 10 percent.

ERQ account is the portion of export earnings that an exporter saves as foreign currency.

With this account balance, exporters could promote their businesses abroad, open liaison office(s), and cover import cost of raw materials and machinery without needing prior approval of Bangladesh Bank.

According to the circular, exporters of those goods that have a higher local value addition (more than 60 percent) can retain 60 percent of the export earnings in the ERQ account.

Earlier, exporters could only retain a maximum of 50 percent of the earnings.

Exporters of food products, jute and jute goods, leather and leather goods as well as service sector fall under this criteria.

Moreover, goods that have a lower local value addition (less than 60 percent) could help exporters retain 15 percent against the previous 10 percent of the earnings under ERQ.

Readymade garment exporters fall under this category.

Bangladesh Bank Executive Director Md Ahsan Ullah told bdnews24.com that the decision had been made to assist the exporters to expand their business in the international market.

“Our economy is growing, export market is expanding, reserve position is comparatively well - considering all factors we have taken the decision.”

According to the data provided by Bangladesh Bank, the ERQ account balance on May 19 was Tk 347 million.

Bank officials say the directive would help exporters by allowing them to save more foreign currency.