Bangladesh’s LC-opening falls by 31% to $5.5bn in July

The amount is 31 percent less than the LCs opened in June

Published : 31 July 2022, 09:28 PM
Updated : 31 July 2022, 09:28 PM

Bangladeshi importers have opened letters of credit, or LCs, worth $5.5 billion in July, down by 31 percent from June, as the central bank has continued to tighten its control over imports.

Bangladesh made a record in exporting goods and services in the last fiscal year, but it was not sufficient to pay the import bills as a low remittance inflow had affected the balance of payments, resulting in a shortfall of US dollar reserves.

To rein in the spending on the US dollar, Bangladesh Bank has started tightening the import of luxury goods since April. However, both settlement and opening rates of LCs were high. Finally, the results of the efforts have started to come out.

“We’ve been taking steps to control imports since April, and the new governor [Abdur Rouf Talukder] has continued the efforts,” said Serajul Islam, spokesman for the central bank.

Salman F Rahman, the prime minister’s adviser for private industry and investment, said earlier this the austerity measures initiated by the government and the central banks to rein in a bullish trend of import since the beginning of the second half of last fiscal year are paying dividends as import costs have shrunk to $6 billion from over $8 billion a month.

Goods worth $83.68 billion were imported into Bangladesh through LCs in the last fiscal year, which is a massive 46 percent jump from the previous fiscal year, according to updated import data released by Bangladesh Bank last week.

Importers in Bangladesh had opened LCs worth $92.23 billion to import goods in the fiscal year 2021-22, which is 37.59 percent more than the previous fiscal year.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher