Monthly import bill hits record $6.0b

The single-month import payments hit an all-time high of US$6.0 billion in December 2021 following higher purchase of textile items from the global market to build a satisfactory stock of the capital goods.
Rise in import of capital machinery also pushed up the import payment obligations during the period under review, officials said.
The settlement of letters of credit (LCs), generally known as actual import, in terms of value, rose by 8.32 per cent to about $6.0 billion in December 2021 from $5.54 billion in the previous month, according to the central bank's latest statistics. It was $5.27 billion in October 2021.
"Higher imports have helped to enhance export earnings as well as to implement infrastructure development projects across the country," a senior official of the Bangladesh Bank (BB) told the FE on Monday.
"It's good for the economy in the long run," the central banker noted.
On the other hand, opening of LCs, generally known as import orders, increased by nearly 2.0 per cent to $6.17 billion in December from $6.06 billion a month before. It was $5.63 billion in October 2021.
Bangladesh's overall imports have increased significantly in recent months, following gradual reopening of economic activities - both at domestic and global levels - after more than one year, mainly due to the Covid-19 pandemic, according to the officials.
Besides, higher prices of essential commodities, including petroleum products, in the international market also pushed up the country's import payments during the period under review, they explained.
"The existing upward trend in import may continue until March 2022, if the ongoing trend of economic activities continues," another senior BB official told the FE.
Imports of textile products under back-to-back LC settlement jumped more than 23 per cent to $758.33 million in December from $616.19 million in November, the BB data showed.
"Imports under back-to-back LCs increased in December after an interval, while apparel manufacturers tried to build up a satisfactory stock of textile products," Sayeed Ahmad Chowdhury, director (operations) of Square Denims, told the FE while explaining the latest market situation.
He also predicted that the existing uptrend in such imports would continue in the coming months despite price volatility of the products in the global market.
Imports of textile products under back-to-back LC settlement came down to $616.19 million in November 2021 from $622.64 million a month before.
Imports of capital machinery or industrial equipment used for production increased by more than 67 per cent to $606.21 million in December 2021 against $361.59 million a month ago.
Higher capital machinery imports were needed for apparel and clothing as well as pharmaceutical industries along with implementation of different infrastructure development projects, including metro-rail, according to the BB officials.
They also said higher imports of food-grains also pushed up the overall import expenses of Bangladesh during the period under review.
On the other hand, actual imports for fuel-oils dropped significantly by over 37 per cent to $357.27 million in December 2021 from $568.52 million in the previous month.

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