Bangladesh’s import LC openings fall 23% to $45.52 bn in Jul-Feb FY23

RMG Times
মঙ্গলবার, এপ্রিল ১১, ২০২৩
  • শেয়ার করুন

Fibre2Fashion: Opening letters of credit (LCs) for imports in Bangladesh dropped by around $14 billion, or 23.45 per cent, year on year (YoY) in the first eight months of fiscal 2022-23 (FY23) to $45.52 billion due to restrictions by the central bank and a fall in export orders.

The raising of the LC margin to 100 per cent—among a few other restrictions to minimize the dollar crisis—discouraged businesses from importing capital machinery and luxury goods.

The Bangladesh Bank also directed banks to report imports worth more than $3 million before opening LCs. It adopted the policy of verifying reported international prices of such products before approval.

Bangladesh Bank data shows that in terms of monetary value, the highest LCs were opened for industrial raw material imports, a major part of which was used by garment exporters.

Between July last year and February this year, $15.56 billion worth of LCs were opened in this segment, which is $6.68 billion, or 30.05 per cent, less than the same period of the previous fiscal.

Businesses say they have reduced opening LCs for importing raw materials.

Central bank data shows the opening of import LCs for capital machinery fell by about 54 per cent, in terms of volume, to $2.53 billion.

LC settlements also dropped. Data showed that payments stood at $52.02 billion in the July-February period—down by 1.22 per cent from the same period a year ago.

The central bank also asked to be notified in advance for LCs worth more than $3 million.