Home ›› 06 Oct 2022 ›› Front
Bangladesh’s import volume fell marginally in September as the government and the central bank have made several policy changes in a bid to ease the pressure on the country’s foreign exchange reserves amid a global economic crisis.
Settlement of letters of credit (LC), known as actual import payment, in terms of value, stood at $6 billion in September, down 1.54 per cent from the same month a year earlier, according to the latest data from the Bangladesh Bank.
In August, the government increased the duty and taxes on 300 non-essential and luxury items such as SUVs, mobile phones and home appliances.
Before the move, the BB in July directed the banks to report about all types of foreign exchange transactions, including those of offshore banking operations.
It tightened rules on luxury item imports to put a lid on declining reserves on May 10 this year—a day after the government decided to stop foreign trips of its officials and suspend spending on low-priority projects and foreign tours of officials.
The banks also need to file a report to the central bank 24 hours before opening LC for customers for imports.
Banks have also been instructed to encash 50 per cent of the total balance held in exporters’ retention quota accounts in the names of relevant exporters.
The retention limit of realised export proceeds has also been cut. The revised limit will remain in effect until Dec 31 this year.
The limitations on the transfer of funds between offshore and onshore banking units have also been relaxed. The new measures have been taken as the country’s forex reserves continued to decline.
Soaring prices and shipping costs amid the recovery from the effects of the Covid-19 pandemic and the Russia-Ukraine war have also put pressure on Bangladesh’s reserves, with the dollar prices rising against the taka.
