Overall imports stay subdued, with over 5.0-percent fall in the first quarter (Q1) of the current fiscal, under the hangover of recent austerity and businesses' 'wait-and-see posture' following political unrest.
The deposed government had adopted a tightfisted stance on import amid dollar dearth following depletion of forex reserves and in sync with this came political upheavals and uncertainty.
The actual import in terms of settlement of letters of credit (LCs) fell 5.58 per cent to US$ 16.10 billion during the July-September period of the fiscal year (FY) 2024-25, from $17.05 billion in the same period of the previous fiscal year, according to the central bank's provisional data.
On the other hand, the opening of fresh LCs, generally known as import orders, dropped 8.44 per cent to $15.65 billion in the first three months of the current fiscal from $17.09 billion in the same period of FY'24.
"We expect that import of essential items will increase gradually in the coming months as the central bank withdraws LC margin along with availability of the US dollar," a senior official of the Bangladesh Bank (BB) told the FE while explaining the latest situation of the import trade.
The central banker observes that the situation is improving gradually as the pressure on the country's foreign-exchange market is easing because of higher inflow of remittances and lower import-payment obligations.
But the business community has maintained a 'go-slow policy' mainly for a lack of congenial business environment since July 2024, he explains.
Labour unrest has also hampered demand for imports, particularly back-to-back LCs for apparel and clothing sector, according to the BB official.
Actually, Bangladesh went through a tough time in-between Mid-July and Mid-August because of the recent mass uprising that led to the fall of the Sheikh Hasina government on August 05, 2024.
However, some banks are unable to open LCs smoothly as corresponding banks are still reluctant to support the import procedure of their counterpart of Bangladesh, another BB official said while explaining the downtrend in import in recent months.
He also said BB Governor Dr Ahsan H Mansur had already assured corresponding banks that Bangladesh would clear all overdue payments relating to LCs over the next five to six months.
A corresponding bank is a third-party financial institution that acts as the intermediary between domestic and international banks during foreign-trade transaction.
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), told the FE earlier that imports, particularly of essential items, were expected to increase in the near future that will also help bring dynamism in the country's overall economic activities from the current state of sluggishness.
Earlier on September 05 last, the central bank removed the LC margin on all types of imports, bar luxury goods and goods which are also produced domestically in Bangladesh, aiming to boost business as well as industrialization.
Currently, businessmen are allowed to import all types of capital machinery, consumer goods and raw materials on the basis of 'bank-customer relationship' without any LC margins, according to a notification issued by the central bank that day.
However, importers will still have to pay cent-percent cash margin to open LCs for several luxury goods and import substitutes.
The restrictions included motor cars (sedans, SUVs, and MPVs), electrical and electronics, home appliances, gold and jewellery, valuable assets and pearls, readymade garments, leather goods, jute products, toiletries, furniture, fruits and flowers, non-cereal foods, processed foods, alcohols, and tobaccos.
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