LC settlements also saw an 8.29 per cent drop, falling to $10.34 billion in July-August compared with $11.89 billion in the same period of the last fiscal.

The significant fall was attributed mainly to unrest across the nation.

Business activities came to a standstill in July amid government restrictions imposed during protests against the government job quota system. The unrest subsided after former Prime Minister Sheikh Hasina resigned on August 5 and fled to India.

This political instability, followed by uncertainty, caused businesses to suspend operations, domestic media outlets reported.

Despite restrictive measures by the central bank and a persistent dollar shortage, LC openings for imports had increased slightly in FY24, reaching $68.69 billion—up from $68.24 billion in FY23.

LC openings in the first half of FY24 (July-December) stood at $32.92 billion, compared with $34.78 billion in the same period of 2022.

The increase in LC openings prompted the central bank to sell dollars from its reserves. Over the past 32 months, the central bank sold more than $30 billion from its reserves.

Therefore, gross foreign exchange reserves, according to International Monetary Fund guidelines, dropped below $20 billion on September 11. This depletion is a cause of concern for both the government and the central bank.

Fibre2Fashion News Desk (DS)