The number of Letters of Credit (LCs) for imports has reportedly increased compared to previous years. In FY ’24, LCs totaled $68.69 billion, up from $68.24 billion in FY ’23. However, in the first half of FY ’23, LCs were $34.78 billion, while for the same period in FY ’24, they were $32.92 billion. With the start of the new fiscal year, LC openings have risen, reaching $4.37 billion in July and $6.1 billion in August.
Bankers attribute the increase to the government’s higher imports across various sectors, including power, with the central bank supporting these imports from its reserves. Over the past three years, the central bank has sold nearly $33.91 billion from its reserves, including $12.8 billion in FY ’24, $13.5 billion in FY ’23, and $7.62 billion in FY ’22. Current reserves stand at $15.47 billion, below the IMF’s recommended level. This strain on reserves has contributed to the Taka’s devaluation, reaching 118 BDT per dollar last month.
Source for more details:
