Bangladesh Bank rules out liquidity crisis in banks and says LC opening is being monitored as its special supervision unearthed many cases of both under-and over-invoicing in import and export trade.
Keeping this in view, the central bank has already intensified its monitoring and supervision on external trade, especially in respect of prices and quality of products in global markets, said a spokesperson for the central bank.
Speaking at a press conference Monday, the Bangladesh Bank spokesperson, Abul Kalam Azad, said there is no bar to opening letters of credit for commercial imports and banks are facilitating LCs based on usable remittances they have.
About liquidity in the banking sector, he said there is no crisis. There is over Tk 1.69 trillion in surplus liquid in the banking system.
"Bangladesh Bank will resolve the liquidity issue if emergency emerges," he adds.
Addressing media reports and rumours over LC opening and liquidity crisis, he said the opening of LCs has not been suspended and there is no liquidity crisis either in any bank.
About trade misinvoicing, Mr Azad told FE later that the central bank beeped up monitoring amid US dollar-supply shortage in the wake of a global crunch.
In relation to what is known as fund flight through trade he says over-invoicing has slowed down but under-invoicing is increasing.
"We are closely monitoring external trades, pricing and quality in the international market, and volume worth more than US$3 million must be reported to the central bank within 24 hours of opening LC," he adds about the steps taken in sync with austerity measures declared by the government to tide over the current global dearth.
The spokesman expressed the hope that the demand and supply of foreign currencies would see a balanced condition by next January-February.
He claims the opening of LC is normal but banks are opening LCs considering their stock of foreign currencies.
"LCs worth $1,263 million were opened in the first 10 days of November and it was $4,743 million in October this year," he informed.
Asked about the news of halting LC opening, Mr Azad said, "When the global situation becomes vulnerable, such rumours begin to spread."
In addition, the Bangladesh Bank provides dollar support in payment of government LCs opened for import for priority sectors and essential commodities (fuel, fertilizer and food) to maintain economic stability by keeping the country's energy and food security intact, the notice mentioned.
Besides, remittance earnings saw a 2.8-percent year-on-year growth as the country received $659 million from expatriate Bangladeshis as of 10 November this year compared to $641 million during the same period last year, according to the BB notice.
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