New Letter of Credit (LC) opening fell by 31 per cent in July as Bangladesh bank has continued to tighten its control over imports amid the ongoing volatility of foreign exchange reserve.
In July, the total LC opening was $5.47 billion, down from $7.9 billion in June, according to provisional data of the central bank disclosed on Sunday.
In spite of Bangladesh's record-breaking exports of products and services in the last fiscal year, these revenues were insufficient to cover import costs due to the balance of payments' negative impact from low remittance inflows, which left a deficiency in US dollar reserves.
Bangladesh Bank began tightening import regulations for luxury goods in April in an effort to reduce spending on US dollars. The rates of LC openings and settlements were both high, nevertheless. The efforts have finally begun to show their results.
