Bangladesh Bank (BB) has asked banks to take a minimum cash advance from importers while opening letters of credit (LCs) for rice and wheat to keep their prices at a tolerable level in the domestic market and ensure smooth supply.
The advance payment, also known as the cash LC margin, should be kept at the minimum level depending on the bank-client relationship, as per a BB circular issued on Wednesday.
The food crop prices are showing an upward trend owing to the disruption to the global supply chain because of the negative impacts of the Russia-Ukraine war. As a result, the transport cost of global commodities has gone up, affecting the prices in the local market.
So, it is important to keep the prices of rice and wheat at a tolerable level and ensure a smooth supply, as per the circular.