Dealers can open LCs on 90-day deferred basis

The Bangladesh Bank (BB) on Monday said the authorised dealers can open letters of credit (LCs) for import of onion on 90 days deferred basis under supplier's credit terms.

This means importers need not make any advance payment to banks for opening LCs. The order will remain effective until December 31.

The central bank has issued the circular to increase onion import to boost supply of the spice and help stabilise its price in local market. The local onion market has recently become volatile following impose of export restriction by neighbouring country India.

Mohammed Khurshid Wahab, general manager of the BB's Foreign Exchange Policy Department, signed the circular.

The central bank has taken the step as per paragraph 33 (a), chapter-7 of the Guidelines for Foreign Exchange Transaction 2018, and its subsequent circulars, in terms of which import of specified goods is permissible on deferred/usance basis under supplier's/buyer's credit terms.

"The step was taken to encourage onion importers, as price of the essential cooking item abruptly soared against the backdrop of its export ban by India," said a central bank official.

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