Imports see sharp decline

There is a sharp decline in Bangladesh's import of raw materials for export-oriented industries during the ongoing coronavirus pandemic. 

Raw materials for the export-oriented industrial sector including readymade garments and local industries in Bangladesh are imported from abroad.

Also, the country imports various food products, of which India is the second largest source.

But in recent times from nine countries in the region, Bangladesh's imports have fallen sharply.

The import bills to these nine source countries are paid through the Asian clearing house (ACU). During the months of March and April, ACU bill has gone down to 46 percent at $85 crore, which is the lowest in the last decade.

While the decline in imports will help ease the pressure on foreign exchange, there are fears that there could be a crisis in the supply of various food products in the local market and industrial raw materials.

Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives are the nine member countries of ACU. In every two months, through ACU, Bangladesh pays its import bills to these nine countries. Bangladesh has already paid bills for the term of January-February in the first week of March. The next scheduled bill needs to be paid in the first week this month (May).

According to Bangladesh Bank (BB) sources, Bangladesh's ACU bill for March-April term is $85 crore. ACU bill has never been so low since 2008 – it was $124 crore in the same period last year.

According to experts, this has happened due to the worldwide coronavirus pandemic

The private research institute, research director for Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said imports have been hit hard by economic stagnation due to the coronavirus pandemic.

According to BB sources, about 95 percent of the ACU bill for Bangladesh is from India, and a little from Sri Lanka and Nepal. On behalf of commercial banks, Bangladesh Bank pays the bills to the Central Bank of India.

Due to some loans from the Asian Development Bank, International Monetary Fund and World Bank, Bangladesh Bank saw an increase in the country’s foreign currency reserve to $33 billion last Thursday. This week, Bangladesh will have to repay an amount of $18.5 crore as ACU bills and foreign debt. After paying these debts, Bangladesh Bank's foreign currency reserve will come down to $32 billion again.

Meanwhile, a dollar-crisis has hit the country's commercial banks due to the decline in exports and remittances.

Now, the commercial banks are charging more for dollars from importers who have paid import bills. The commercial banks say they don’t have dollars and are buying from BB to pay for import costs. The central bank has continued to sell dollars during this period. Last Thursday, 3 crores 70 lakh dollars were sold. All in all, Bangladesh Bank has so far sold about $76 crore in the current fiscal year.