Dhaka, Bangladesh (BBN) – Bangladesh’s overall import orders entered into a negative territory in the fiscal year (FY) 2011-12 mainly due to lower import of food grains and luxury items, officials said.
Opening of letters of credit (LCs) against imports, generally known as import orders, registered a negative growth by 4.29 percent in the July-June period of the FY `12 against 34.04 percent growth in FY ’11, according to the central bank statistics.
“The declining trend may continue in the coming months as the central bank wants to curb inflation through discouraging credit flow to the unproductive sectors,” a senior official of the Bangladesh Bank (BB) told BBN. 
The latest statistics of the BB showed that the import LCs worth $36.93 billion were opened in the FY ‘12 against $38.58 billion a year ago.
The central bank of Bangladesh earlier advised the commercial banks to discourage extending credits to less productive sectors including luxury items for reining in the inflationary pressures on the economy.
“The BB is taking the measures in line with our existing monetary policy statement (MPS),” the central banker said without elaborating.
Earlier on July 18 last, the BB unveiled new half-yearly monetary policy statement (MPS), aiming to curb inflation further while ensuring adequate credit flow to the private sector for achieving ‘inclusive’ economic growth.
On the other hand, the settlement of LCs, generally known as actual imports, grew by nearly 9.0 percent in the FY ‘12 from that of 38 percent in the previous fiscal.
The value of LCs against imports worth US$ 34.72 billion were settled in FY ‘12 compared with $31.95 billion in the previous fiscal, the BB’s provisional data showed.
“The imports of intermediate goods, industrial raw materials, petroleum products and capital machinery increased substantially in the last fiscal year,” the BB official said, adding that the rising trend of essential item imports will continue in the coming months to meet the growing demand for those items in the local market.
 
BBN/SSR/AD-26July12-11:01 am (BST)