Dhaka, Bangladesh (BBN)- Bangladesh’s overall imports dropped over 5.0 per cent in the first quarter (Q1) of the current fiscal as the country faced political unrest as well as uncertainty that has also forced businessmen to adopt a ‘wait and policy’.
The actual import in terms of settlement of letters of credit (LCs) fell by 5.58 per cent to US$ 16.10 billion during the July-September period of the fiscal year (FY), 2024-25, from $17.05 billion in the same period of the previous fiscal year, according to the central bank’s provisional data.
On the other hand, the opening of fresh LCs, generally known as import orders, dropped by 8.44 per cent to $15.65 billion in the first three months of this fiscal from $17.09 billion in the same period of FY’24.
Economists as well as central bankers expect that import of essential items will increase gradually in the coming months as the central bank withdraws LC margin along with availability of the US dollar.
They also said that the situation is improving gradually as the pressure on the country’s foreign exchange market is easing because of higher inflow of remittances and lower import payment obligations.
But the business community has maintained a ‘go slow policy’ mainly due to the lack of congenial business environment since July 2024, they explained.
Actually, Bangladesh went through a tough time in- between Mid-July and Mid-August because of the recent mass uprising that led to the fall of the Sheikh Hasina government on August 05, 2024.
On the other hand, some banks are unable to open LCs smoothly as corresponding banks are still reluctant to support the import procedure of their counterpart of Bangladesh, according to BB officials and commercial bankers.
Meanwhile, BB Governor Dr. Ahsan H Mansur had already assured correspondent banks that Bangladesh will clear all overdue payments relating to LCs within the next five to six months.
A correspondent bank is a third-party financial institution that acts as the intermediary between domestic and international banks during foreign trade.
Earlier on September 05 last, the central bank removed the LCs margin on all types of imports, except luxury goods and goods which are also produced domestically in Bangladesh aiming to boost the country's businesses as well as industrialization.
BBN/SSR/AD