Import LCs dropped by 44pc in June

Staff Reporter :
The opening of letters of credit (LCs) worth $4.75billion for imports dropped by 44 per cent year-on-year in June of the just-ended FY23, which was the lowest in the entire financial year of 2022-23.

Bankers said LCs opening become difficult for traders to import goods due to various restrictions of the central bank.

Traders are discouraged from opening LCs as there is a 100 percent margin on imports of certain products.

Bankers also said that traders are interested in opening sight LC, which is payable immediately (within 5-10 days) after the seller meets the requirements of LC.

Officials said, adding that as the dollar price continues to rise, traders fear
that it may rise further in the coming days. Banks are more interested in opening deferred LCs than sight LCs as they are experiencing a shortage of dollars, they added.

Earlier, import LCs worth about $5.84 billion were opened in May and LCs worth $4.85 billion were opened last April, data showed.

A total of $94.27 billion worth of LCs were opened in FY22, which dropped to $69.36 billion in FY23, meaning LC openings decreased by about $25 billion or 27 percent year-on-year because of the current dollar crisis.

Managing the forex crunch, the central bank continued to sell dollars from the reserve as a result it sold record $13.58 billion from reserves in just-ended FY23.

On July 13, Bangladesh’s foreign exchange reserves stood at $23.57 billion according to the BPM6 (Balance of Payments and International Investment Position) method recognized by the IMF, according to Bangladesh Bank.