In response to the ongoing dollar crisis, the government has undertaken a series of measures aimed at controlling imports. These include an increase in import duties, setting the Letter of Credit (LC) margin up to 100%, and implementing regular monitoring of LC information. The primary objective behind these initiatives is to reduce the import of luxury goods. However, the impact of the dollar crisis has resulted in a more substantial decrease in the import of capital equipment and industrial raw materials.
Recent data from Bangladesh Bank reveals that LCs worth $62.4 billion were opened during the first 11 months of the current financial year, reflecting a decrease of 25.34% compared to the same period in the previous year. Among various categories, the import of capital equipment witnessed the most significant decline. During the same period, LCs valued at $2.69 billion were issued for the import of capital equipment, representing a sharp decline of 55.09% compared to the previous financial year’s figure of $6 billion.
The second-highest decline was observed in the import of industrial raw materials, with its LC falling by 30.15% to $24.21 billion. Intermediate goods saw a decline of 24.30% to $5.26 billion, while consumer goods decreased by 18.10% to $7.14 billion. Furthermore, the LC for petroleum witnessed a decrease of 4.73% to $8.44 billion.
Stakeholders have highlighted that many individuals, despite having sufficient funds, are unable to open LCs due to a shortage of dollars. Additionally, the strict measures imposed by the central bank to combat money laundering disguised as trade activities may have contributed to the decrease in LCs. To maintain stability in the market, the central bank has sold over $13 billion to various banks thus far in the financial year. This represents a substantial increase compared to the previous fiscal year, during which sales amounted to $7.62 billion.
