Dhaka, Bangladesh (BBN) – Bangladesh's import orders experienced a slight increase in FY 2023-24, despite ongoing challenges in the foreign exchange market and the central bank's efforts to curb unnecessary imports.
According to the latest data from the central bank, the opening of letters of credit (LCs)—commonly referred to as import orders—rose by 0.65% to $68.69 billion in FY ’24, up from $68.25 billion in the previous fiscal year.
This modest increase in LC openings is largely attributed to the government’s heightened imports of essential commodities such as petroleum products and fertilizers, according to market insiders.
They also noted that the central bank has been providing foreign currency liquidity support from its reserves to settle the government’s import payment bills.
Since April 2022, the government and the central bank have taken several measures to curb the decline in foreign exchange reserves, primarily by limiting non-essential imports.
As part of these efforts, the Bangladesh Bank (BB) imposed high LC margins on imports, especially targeting non-essential and luxury items.
Despite the increase in import orders, actual imports—measured by the settlement of LCs—fell by 8.29% to $66.05 billion during the July-June period of FY ’24, down from $72.02 billion the previous year.
This decline reflects the success of the government and central bank's efforts to reduce unnecessary imports but also highlights a decrease in overall import volumes.
Outlook: If external pressures ease, both import orders and actual imports may gradually increase in the coming months, indicating a potential stabilization or improvement in the economic conditions affecting foreign trade.
BBN/SSR/AD