Import letter of credit (LC) payments in September increased by 24% compared to the same period last year, driven by overdue payments, despite falling due to political unrest in the first two months of the current fiscal year.

According to central bank data, imported LC payments reached $5.87 billion in September; This is approximately $1.15 billion higher than the same period last fiscal year, when $4.72 billion in LCs were paid.

“Import payments could not be processed in July due to internet shutdowns and disruptions in normal banking operations. Additionally, traders faced difficulties in making payments in August due to several days of instability,” said General Manager and CEO Mohammad Ali. From Pubali Bank.

“As a result, some of the overdue payments for these two months were made in September, which is the main reason for the increase in payments,” he told TBS.

According to central bank data, import LC payments between July and September of FY25 totaled $16.21 billion compared to $16.61 billion made in the same period last fiscal.

Data analyzing import LC payments on a sector basis reveals that the biggest decline in LC payments in the first three months of FY25 was 25% in imports of capital machinery compared to the same period of the last fiscal year, while imports of consumer goods fell by 17.6%.

Additionally, LC payments for all types of products, including oil and intermediate goods, have also decreased. However, payments for industrial raw materials increased by 8.3%.

Noting that pressure from overdue government import payments has eased, the deputy managing director of a private bank told TBS that since central bank governor Ahsan H Mansour took office in mid-August, efforts have been made to address around $2 billion in overdue government debts. he said. payments.

He stated that this figure has now fallen below 1 billion dollars, and that the pressure on the dollar will become easier after these payments are made in the next few months.

According to central bank data, the opening of LCs in September FY25 decreased slightly compared to the same period last fiscal. Import LCs opened on September 25 reached $5.57 billion, down from $5.20 billion in September of the previous fiscal year.

As an import-dependent country, Bangladesh should target monthly imports of at least $5-6 billion, a senior central bank official said. Given the size of the economy, the country needs more imports; Therefore, increasing the opening of imported LCs in the coming days will be beneficial for the economy.

However, many officials at the policy-making level of both the government and private banks stated that there was no significant pressure to open import credits in October as the political situation in the country remained unstable. As a result, there was no significant increase in imports because businesses were reluctant to make new investments.

According to central bank data, the opening of imported LCs between July and September of FY25 reached $15.59 billion, compared to $16.72 billion in the same period last fiscal.

Many banks reported that most of them offer a rate of Tk 120-Tk 121 for remittance purchases in dollars, while the import payment rate ranges from Tk 121 to Tk 121.50.