Staff Reporter :
The opening of letters of credit (LCs) for imports in the country dropped by 6.74 per cent to reach $15.59 billion during the first quarter (July-September) of the current financial year of 2024-25 , compared to $16.71 billion in the same period in the last fiscal, according to the Bangladesh Bank.
Correspondingly, LC settlement also declined marginally to $16.21 billion in July-September in FY25 from $16.61 billion in the same period in the previous year.
Economists and people involved in the banking sector said the political unrest surrounding the Anti-discrimination Student Movement in July and August has significantly impacted imports in this period resulting in the decline in letters of credit, or LCs, to the stagnation in investments.
In July – August , In July and August, LCs worth $10.03 billion were opened, which is $1.48 billion less than the same period in the previous fiscal year when $11.51 billion LCs were opened.
However in September, the opening of LCs for imports increase showing a upward turn to $6.7 billion compared to that of $5.37 billion in September in the past year reflecting business activities started recovering at the beginning of September although some uncertainties still persisted.
Additionally, in July-September, the data showed a significant decrease in LC opening for capital machinery and petroleum imports, which fell by 40.9 per cent and 26 per cent respectively, compared to those in the same period of the previous year.
Likewise, analyzing sector-wise import LC payments, the data reveals that the largest decline in LC payments during the first three months of FY25 was 25 percent for capital machinery imports compared to the same period last fiscal year, while consumer goods imports fell by 17.6 percent .
On September 18, Bangladesh Bank (BB) Governor Ahsan H Mansur assured that Bangladesh will clear all overdue payments relating to letters of credit (LCs) within the next five to six months.
Bangladesh’s state-run and private commercial banks have hefty overdue payments against LCs, which must be paid to correspondent banks.
