Higher LCs in Jan, no worries about Ramadan goods: Cenbank
The Bangladesh Bank claims the information that traders are not able to open LCs is not correct
Importers opened more letters of credit (LCs) in January compared to the same month of the previous year, said the central bank spokesperson on Thursday, alleviating fears of shortage of essentials during the upcoming Ramadan.
"An adequate number of LCs have been opened over Ramadan. Still traders are complaining about the LC opening," said Mejbaul Haque, also an executive director of the Bangladesh Bank, rejecting the allegations as "baseless".
At a press conference at the central bank headquarters, he said five products are most in demand during Ramadan, and to keep the market normal, the central bank is providing all kinds of cooperation for their import.
"According to the data, LCs were opened in January 2023 for the import of 5.66 lakh tonnes of sugar. It was 5.11 lakh tonnes during the same month a year ago. So, in January of this year, LCs were opened for approximately 55,000 tonnes more sugar," he explained.
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Mejbaul Haque said, apart from this, the opening of LCs for the other products except chickpeas has increased in the last month compared to January of the previous year.
"Compared to the previous year, importers have opened LCs for an additional 39,000 tonnes of edible oil, 6,330 tonnes of onions and 13,000 tonnes of dates. But the LCs for chickpea have been lowered by 41,000 tonnes," he added.
According to the data, from October to December of 2022, LCs were opened for importing 3.51 lakh tonnes of edible oil down from 4.92 lakh tonnes in the same period a year earlier.
Part of the demand for edible oil is met by producing oil from imported seeds. Importers opened LCs for only 78,000 tonnes of soybean seeds between October and December of last year. About five times the number of LCs opened during the same period of the previous year.
Similarly, in the final three months of last year, LC openings for sugar decreased by 1.48 lakh tonnes, chickpeas by 68,000 tonnes and dates by 10,000 tonnes compared to the same period in 2021. However, during this period, LC openings for onions have increased by 5,000 tonnes.
Still, the central bank spokesperson said that there will be no shortage of goods in Ramadan if their transportation and supply is ensured.
"Besides, we have paid special attention to increasing exports. Bangladesh has exported goods worth $5 billion every month since November. Total export earnings from July to January of the current financial year stood at $32 billion as against $29 billion in the same period a year ago," he added.
Mejbaul Haque said in the last seven months, the total earnings from remittances and exports stood at $44 billion.
"But the entire amount of the foreign exchange did not reach our hands because foreign buyers get 120 days to pay after imports. But against this, $39 billion of import bills have to be paid," he added.
Asked about any policy change, the Bangladesh Bank spokesperson told journalists that no policy can be changed suddenly considering the economic situation.
"The Ukraine-Russia war, the Covid-19 pandemic and the rise in interest rates on global debt have affected the economy. As a result, we are slowly moving towards reforms," he added.
He cited an example of raising the consumer interest rate on bank loans from 9% to 12% as part of the reforms.
Mejbaul Haque said the press conference was called to give a message of relief about the imports of Ramadan goods.
