Jumbangla Desk: In the first quarter of the current financial year (July-September) the amount of opening and settlement of LCs has decreased. At this time only the raw materials of the industry were imported.

BD Bank

As a result, total import LC opening has decreased by about 7 percent compared to the same period of the previous year. Similarly, LC settlement has decreased by 2.50 percent. This information has come out in the July-September period report of Bangladesh Bank.

According to the report, LC opening and settlement rates increased last September but overall declined in the first three months of the current fiscal year. In this regard, experts believe that the amount of new investment will increase when political stability returns to the country. As a result, the amount of imports will also increase. Stability will come to the overall economy.

According to Bangladesh Bank's report, import LCs worth $1,559 million were opened during July-September this year. At the same time LC of 1 thousand 621 crore dollars was settled.

Businessmen import raw materials from different countries of the world and capital machinery to establish new industries to keep the production of factories normal. As the buyer and seller are citizens of different countries in the import process, the import process is completed through letter of credit (LC).

According to the report, capital equipment imports fell by more than 41 percent during the July-September period. Imported capital equipment worth $380 million in three months. Capital machinery worth Tk 65 crore was imported during July-September 2023. Settlements fell by 25 percent during the same period. In the first three months of the current financial year, 49 million dollars of debt was settled; Which was 65 million dollars in the same period of the previous financial year.

Apart from this, in the first three months of the current fiscal year, the LC opening for the import of consumer goods has decreased by 17.50 percent. During this period, consumer goods worth 137 million dollars were imported. Imports during the same period a year ago were 1.66 billion dollars. Imports of intermediate goods decreased by 13.25 percent. In the first three months of this financial year, the goods worth 114 million dollars have been imported. Imports during the same period of the previous year were 132 million dollars. Similarly, the import of petroleum products has decreased by 7.25 percent.

Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank, said, 'Inflation has increased, people have less money. Purchasing power is decreasing. Extreme poverty rates are increasing. Demand in the domestic economy is also declining. Naturally, those who produce will not produce as before. If production decreases, imports will also decrease. Which affects LC opening rate. '

He also said, 'Even after the arrival of the present government, there was an additional arrears of 250 million dollars. They have now been settled. Due to which LC settlement increased. '

Former Director General of Bangladesh Institute of Bank Management Taufiq Ahmed Chowdhury said, 'The factory is not running properly. Many factories were burnt down. New factories are not being built. Demand has decreased. So why do you bring capital equipment?'

He also said, 'Political stability is important now. If this is confirmed, the traders will return to work. Manufacturers will start production. The affected companies will try to turn around. '

LC opening and settlement rates increased in September but overall declined in the first three months of the current fiscal, the report said. During July-September, the import of industrial raw materials was worth 5.72 billion dollars. Imports during the same period of the previous year were 5.29 billion dollars.

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Last September, LC opened at $5.57 billion; Which was 520 crores in the same period of 2023. In September of this year, the import settlement was 587 million dollars; Which was 472 crores in September of the previous year. 115 million dollars or 24 percent more than a year ago.

Courtesy: Bangladesh Daily