Banks opening LCs considering dollar stock: BB

Staff Reporter :
The demand and supply of foreign currencies will see a balanced condition by next January-February hopefully, said the Bangladesh Bank (BB).
It also claimed that the Media reports that the opening of letter of credits (LCs) has been suspended are not true.
G M Abul Kalam Azad, Executive Director and Spokesperson of the central bank, came up with the remarks while speaking at a press briefing at the BB’s conference room in the capital on Monday.
He said, “Conspiracy news is being circulated on various social media. Investors are being asked to withdraw their bank deposits. It is also said that banks do not have cash or have a liquidity crisis. But it is not true.”
“The country’s banking system is very strong and there is no liquidity crisis. Currently there is an excess liquidity of over Tk 1.69 trillion,” he informed.
“Bangladesh Bank’s policy of ‘Repo and Assured Liquidity Support’ is always on for liquidity management. The inspection and supervision department of the bank is very active,” Azad informed.
“People’s deposits in banks are completely safe. Nothing has happened to panic regarding this,” he added.
He further said the LCs worth $1263 million were opened on the first 10 days of November and it was $4743 million in October this year.
When asked about the news of halting LC opening, the BB spokesperson said, “Banks are opening LCs considering their foreign currencies stock. This kind of rumour spreads, when the global situation goes to a vulnerable state.”
“Bangladesh Bank has issued a special warning to all banks regarding the liquidity situation of banks. If there is any disruption in liquidity management in any bank, Bangladesh Bank will take steps to solve it with utmost importance,” he said.
Meanwhile, in a notice the bank regulator said that there is no bar on the opening of commercial letter of credit (LC).
In addition, the Bangladesh Bank provides dollar support in payment of government LCs opened for import of priority sectors and essential commodities (fuel, fertilizer and food) to maintain economic stability by keeping the country’s energy and food security intact, the notice added.
Besides, remittance earnings saw a 2.8 per cent year-on-year growth as the country received $659 million from expat Bangladeshis as of 10 November this year compared to $641 million during the same period last year, according to the BB notice.