ACU payments rise amid seasonal import surge

The country's import payments under Asian Clearing Union (ACU) arrangement increased substantially during the July-August period of this year mainly due to increased imports ahead of Eid-ul-Azha coupled with increased rice import due to flood.

The amount of such payments rose by 16.47 per cent to $1.19 billion during the two-month period from $1.02 billion of previous two months due to higher seasonal imports from the ACU member countries-mainly from India, according to officials.
"Imports of grocery items, including onion and garlic, increased in the last two months to meet the increased demand for the items due to the Eid," a senior official of Bangladesh Bank (BB) told the FE Thursday.
He said increased rice imports from India have also pushed up the overall import payments under the ACU arrangement during the period.
Bangladesh is also importing different consumer items like cotton, raw materials and capital machinery from the ACU member countries, particularly from India, the central banker added.
After the payment, Bangladesh's foreign exchange (forex) reserve came down to $32.49 billion Thursday from $ 33.64 billion on the previous working day, they added.
"We've already remitted the fund to the ACU headquarters in Tehran in line with the existing provisions of the union," another BB official told the FE.
He said the country will be able to settle eight months of import bills with the existing forex reserve.
The actual import in terms of settlement of letters of credit (LCs) grew by 10.47 per cent to $ 44. 27 billion in the fiscal year (FY) 2016-17 from $40.08 billion in the previous fiscal year, the BB data showed.
Under the existing provisions, outstanding import bills and interests are to be paid at the end of every two months among the member countries.
The ACU is an arrangement involving Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan, Sri Lanka and the Maldives, through which intraregional transactions among the participating central banks are settled on a multilateral basis.
The union started its operation in November 1975 to boost trade among the member countries. Bangladesh and Myanmar joined the union as the sixth and seventh members in 1976 and 1977 respectively. Bhutan joined the ACU in December 1999 and the Maldives in January 2010.
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