The rising pressures on country’s foreign currency reserves and the volatile market as imports were higher than exports and remittance, central bank here started tightening measures to discourage further imports. That was the scenarios behind why opening LC declined, Bangladesh bank said that private and public entities opened LCs of 69 billion USD in FY23 compare to 94 billion USD a year ago which is 26% down.
BB asked all the banks to take up to 100% of import payments in advance from the enterprises and started monitoring imports amounting to 3 million USD and above before allowing business to open LCs, to stop the depletion of the reserves.
During the 11 month period, businesses opened 2.7 billion USD worth of LCs for capital machineries which was almost 50% lower year on year.
LCs opened for the import of industrial raw materials slumped 30% to 21 billion USD. The ratio of decline was 24% for intermediate goods, according to Bangladesh Bank. Overall, business opened 18% lower LCs of 7.14 billion USD in July-May period.
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