The Central Bank of Bangladesh has put on hold transitions with Sri Lanka , a measure that could affect trade between the two countries.

Authorized dealers including banks have been asked to refrain from transactions with Sri Lankan banks through the Asian Clearing Union (ACU) system.

The move will be implemented from the 14th of October. Sri Lanka has an outstanding balance of 1.2 billion USD, which Sri Lanka owes to India and also it owes Bangladesh.

SRI Lanka is unable to settle its loans and payment is being deferred every time the amount comes up, and now Bangladesh may be taking precautionary action to protect its own interest, said a financial analyst.

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