Dhaka, Bangladesh (BBN) – Most of the commercial banks are worried about falling trend in the opening of fresh letters of credit (LCs) against imports because it might hit their profit earning this year.
The banks are now planning to provide financial assistance to real businessmen to help them continue with their business activities. They have already sought policy support from the central bank in this connection, bankers said.
The opening of fresh LCs against imports drastically fell by over 43 per cent in October over that of the previous month because of substantial drop in prices of commodities in the global market.
Import LCs worth US$1.341 billion were opened in October last as against $2.357 billion in the previous month, according to central bank statistics.
The declining trend in opening of LCs for imports continued until the first week of this month, the central bank officials said.
Import LCs worth $327.82 million were opened in the first week of November against $530 million of the corresponding period of the previous year, the BB’s data showed.
The opening of LCs for import of some essential items, including rice, wheat, sugar, edible oils and pulses declined in terms of both value and quantity with the falling trend in the prices of the commodities in the international market persisting, they added.
During the period, opening of LCs for rice dropped by $155.93 million to $0.03 million in terms of value while LCs for wheat declined by $18.32 million to $49.67 million, sugar by $19.40 million to $1.03 million, edible oil by $6.95 million to $61.59 million and pulses by $7.26 million to $2.24 million.
On the other hand, opening of LCs for wheat import fell by 16,000 tonnes to 167,000 tonnes in terms of quantity. For sugar it dropped by 57, 000 tonnes to 3,000 tonnes and pulses by 11,000 tonnes to 3,000 tonnes during the period.
The opening of LCs for edible oil, however, increased by 10,000 tonnes during the period under review.
BBN/SI/SS/AD-16November08-5:32 PM (BST)