The Bangladesh Bank recently asked banks to take up to cent per cent import payments in advances from businesses while opening letters of credit (LCs) for luxury and non-essential items. A notice was issued to this effect, saying the initiative would help keep the financial sector stable amid the dragging volatility stemming from rocketing import bills.

The import bills have been exacerbated by higher commodity prices and the supply bottlenecks fuelled by the Russia-Ukraine war.

Though the central bank imposed a margin of up to 75 per cent on a number of imported items on May 10, the decision failed to control the purchase of foreign goods and products, prompting another raise.

Now, banks will have to impose a margin of at least 100 per cent on the opening of LCs for electronic goods like air conditioners, refrigerators and washing machines. The same rate would be applicable for sedan cars and sport utility vehicles, gold and gold ornaments, readymade garments, leather and jute goods, cosmetics, furniture and home decor items.

Importers will have to pay 75 per cent of the import prices for all other goods upfront.

Importers will have to bear the margin costs from their own coffer and they will not be allowed to take up loans from banks to meet the expenditures.

The country’s foreign exchange reserves were down to $41.86 billion on June 29 from $46.08 billion a year ago due to rising import bills against moderate exports and lower remittance brought.

Most banks in the country are facing a US dollar crisis due to the escalated imports. As a result, the exchange rate of the taka has weakened against the dollar.

Fibre2Fashion News Desk (DS)

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