Bangladesh Bank eases LC cash margin for 8 products before Ramadan

These products become costlier because of high demand in the Islamic month of fasting

Bangladesh Bank has relaxed the cash margin for import of eight products to facilitate smooth supplies in Ramadan, when these products get costlier because of a high demand.

The banks will be allowed to issue letters of credit for these items based on their relations with the clients, the central bank said in a notice on Wednesday.

The relaxation will be effective until Mar 31 with the Islamic month of fasting expected to begin on Mar 11, subject to the sighting of the moon.

The products are cooking oil, grams, lentils, pulses, onions, spices, sugar and dates.

The Bangladesh Bank also ordered the banks to prioritise the issuance of LCs for these products.

On Jan 11, the central bank gave traders the opportunity to import these items for Ramadan on deferred payment terms effective for up to 90 days under the supplier or buyer’s credit.

Bangladesh raised the cash margin for the import of non-essential goods from 50 percent to 75 percent in a bid to save up dollars in 2022 amid dwindling foreign currency reserves. The cash margin for the import of luxurious products was also raised to 100 percent.

Baby foods and other essential food items, fuel, medicines and equipment were left out of the measure to ensure their supply.