Lifting LC margin will help stimulate trade, investment: DCCI

FE Team | Published: September 08, 2024 22:13:55

FE REPORT
Dhaka Chamber of Commerce and Industry (DCCI) said on Sunday that the Bangladesh Bank's (BB) decision on lifting the letter of credit (LC) margin will help stimulate trade and investment in the country.
It also said that 'Revolving Refinancing Fund' of BB will facilitate CMSMEs financing.
The trade body made the observations in a statement issued on the day.
Earlier the BB through a circular recently took a decision of lifting the LC margin on all types of imports except for some luxury products manufactured in Bangladesh with a view to largely alleviate the recent stagnation caused at the product import level and gearing up industrialisation.
The DCCI expects that the initiative of forming a 'Revolving Refinancing Fund' by the central bank with the aim of expanding the financial services for the development of cottage, micro, small and medium enterprises (CMSME) in the country will make the financing of entrepreneurs in this sector easier.
It (DCCI) also applauded the BB for taking such initiative in the prevailing situation of the financial sector and economy.
The DCCI said that as per the directives of the central bank, from now on importers can import all types of capital equipment, consumer goods and capital raw materials without any margin on the basis of bank-customer relationship.
Moreover, if imports increase; new investment, re-investment, availability of capital equipment and overall industrial production will subsequently increase, that would bring a positive result in export growth, Dhaka Chamber President Ashraf Ahmed expects.
Along with this, the supply of raw materials to the industries will also increase; as a result, factories will be able to ensure full-fledged production at their highest capacity. Supply of products in the market will accordingly increase as well as it may have a positive impact on the overall inflation situation of the country.
On the other hand, while we are experiencing the ongoing liquidity crisis in the country's financial sector, especially difficulties in obtaining easy lending by the CMSMEs and lower credit flow to the private sector; at that time such an initiative of a 'Revolving Refinancing Fund' by the central bank would play a pivotal role in getting refinancing benefits for the small entrepreneurs, said the statement of the trade body.
talhabinhabib@yahoo.com