Dhaka, Bangladesh (BBN)– Bangladesh’s overall import fell significantly in April over that of the previous month as importers slowed down opening letters of credit (LCs) ahead of the budget for fiscal 2011-12 beginning in July next.
Opening of fresh LCs against imports, generally known as import orders, declined by nearly 27 per cent during the period over that of the previous month of the current year, according to the central bank statistics. 
“The import fell in April as most of the importers preferred to wait until the announcement of next budget, which might offer some changes in tax structure,” a senior official of the Bangladesh Bank (BB) said, adding that import might fall further this month on the same ground. 
The settlement of LCs, generally known as actual imports, dropped by over 11 per cent during the period under review over that of the previous month of this calendar year.
LCs worth $2.523 billion were opened in April compared to $3.453 billion in March 2011 while the LCs against imports worth $2.568 billion were settled in the month of April against $2.895 billion in the previous month of this calendar year, the BB’s data showed.
Bankers, however, said the importers are now following ‘wait and see policy’ for opening of LCs for imports ahead of the new national budget for the next fiscal year.
“Most of the importers are informing us that they will open fresh LCs for imports after announcement of the next budget,” a senior official of a commercial bank said. 
Finance Minister AMA Muhith is scheduled to announce national budget for FY12 on June 9, in parliament.
“The country’s overall import may pick up after the announcement of the budget in June this year,” another BB official said. 
The central bank official also said that the BB has already warned the commercial banks to keep the lending rate on import financing for nine essential food items at maximum 12 per cent.
In May 2009, the central bank asked the commercial banks to bring down the lending rate on import financing for nine essential food items to a maximum of 12 per cent from 13 per cent. 
The essentials are: edible oil, gram, pulses, peas, onion, spices, date, fruits and sugar. 
 
BBN/SSR/AD-09May11-9:00 pm (BST)