April import LC openings in Bangladesh down 7% MoM, up 20% YoY

29 May '24

1 min read

Apr import LC openings in Bangladesh down 7% MoM, up 20% YoY

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Insights

Bangladesh's opening of letters of credit (LCs) in April fell by 7 per cent due to factory closure for a festival, but import bill settlements rose by 2 per cent month on month.
Banks opened import LCs worth $5.68 billion in April—down from $6.13 billion in March, but higher than February's $4.73 billion.
April's figure is 20 per cent higher YoY.

The opening of letters of credit (LCs) in Bangladesh in April dropped by 7 per cent due to factory closure for a festival, but import bill settlements rose by 2 per cent month on month (MoM).

Banks opened import LCs worth $5.68 billion in April—down from $6.13 billion in March, but higher than the $4.73 billion in February, central bank data show. April's figure is 20 per cent higher year on year (YoY).

The need for raw materials falls as production at factories stops. Hence, the tendency to open import LCs declines during Ramadan months.

The central bank has, however, implemented several measures over the last one and a half years to reduce imports, including maintaining import LC margins at cent per cent and discouraging the import of luxury goods.

This has resulted in an improvement in the trade and current account balances in the country's balance of payments.

The financial account deficit is, however, worsening due to rising pressures from government and private debt repayments and trade credit, domestic media outlets reported.

Fibre2Fashion News Desk (DS)

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