Opening and settling of import letters of credit (LCs) increased by about 25% and 10% respectively in May, compared to the previous month of ongoing FY24 despite the persisting dollar crisis.
According to Bangladesh Bank data, new LCs worth $5.33 billion were opened in May, $1.03 billion more than in April.
Similarly, LCs worth $4.69 billion were settled by banks in May, which was a 10% increase over the previous month.
LC opening reached a 32-month low in April due to a combination of restrictions implemented by the Bangladesh Bank and the ongoing dollar crisis.
Additionally, LC settlement reached a 21-month low in that month.
Import LCs worth only $4.30 billion were opened last April while settlement amounted to $4.69 billion.
During the period of July to April in the current financial year, a total of $56.36 billion worth of import letters of credit were opened, marking a decline of approximately 27% compared to the same period in the previous financial year.
LC settlements in the first 10 months of the fiscal year amounted to $62.40 billion, reflecting a nearly 8% year-on-year decrease.
Central bank reports show a 46% drop in LC openings for industrial machinery like computers or motorcycles.
LC openings for industrial raw materials like textile fabrics and chemicals fell by 32%, intermediate goods like cement and scrap vessels fell by 31%, consumer goods like rice and wheat fell by 18%.
The central bank sold around $12.67 billion to banks in the 10 months (July-April) of FY23.
The country’s reserves stood at $29.91 billion at the end of 31 May, which was $42.20 billion at the corresponding time of the previous fiscal.
