Banks to verify quoted global commodity prices

Bangladesh Bank on Monday asked banks to verify the price of commodities, quoted by importers, in the global market.

“Given the prevailing global commodity market trends, Authorized Dealers (ADs) are advised to adhere to regulatory parameters for verification of import prices and price competitiveness,” read a Bangladesh Bank circular.

“As usual, ADs shall comply with extended due diligence in import transactions and relevant regulations without limiting to provisions of Import Policy Order in force, credit reports of suppliers, KYC and AML/CFT standards, and so on,” the release added.

Bangladesh’s economy has experienced a strong rebound from the pandemic-induced downturn in 2022, but the spikes in global commodity prices – aided by unfolding geopolitical conflicts – may create price pressure for the country, causing the government to miss its inflation target, observes the Bangladesh Bank in March this year.

In its monetary policy review 2021, released on March 02 this year, the central bank also addressed a number of risks, including negative pressure on the balance of payment amid high imports and the severity of the ongoing pandemic, which may cast a cloud over the growth prospects.

“The recent global commodity price hikes amid unfolding geopolitical conflicts may exert some inflationary pressures in the coming days, making it difficult to maintain the CPI inflation within the target set for FY22,” the review report said.

Moreover, due to the increase in import payments caused by disruptions in the global supply chain, Bangladesh’s foreign exchange market has recently experienced volatility.

In the first two months of this fiscal year, the country’s import payments rose 17 per cent from the previous year to $12.7 billion.