Govt formulates new tariff policy to boost trade

Investors are hesitant to commit to new investments until the law and order situation improves. In the past two months, letters of credit for importing capital machinery dropped by 44%, and the import of intermediate goods also decreased. Economists argue that restoring investor confidence and achieving economic stability is crucial, highlighting the need for reforms. The business environment has been unstable due to student protests, political changes, floods, and unrest in the garment sector. Data shows that in July-August, import letters of credit for capital machinery totaled $285.6 million, a 44% decrease from the previous year.

In the first two months of FY25, both import-related letter of credit (LC) openings and settlements fell by approximately 13% due to political instability and stagnant investment. Data shows $10.03 billion in import LCs were opened in July-August, down nearly $1.5 billion from the previous year. The decrease is attributed to unrest from anti-discrimination protests, a five-day internet blackout, and disruptions in transport and banking.

The decline in LC openings, particularly in capi

The Metropolitan Chamber of Commerce and Industry (MCCI) has recently released its projections for imports, remittances, and foreign exchange reserves for the next quarter of this fiscal year. According to their estimates, imports are expected to reach $5.68 billion in September, up from $5.52 billion in August and $5.39 billion in July. Similarly, remittances are projected to grow to $2.29 billion in September, an increase from $2.18 billion in August. The foreign exchange reserves are expected to rise to $27.95 billion by the end of September.

Bangladesh is experiencing a decline in imports of capital machinery, industrial raw materials, and intermediate goods for the second consecutive fiscal year, signaling a slump in private investment and dim prospects for job creation. 

Imports of green chillies, tomatoes, and roe-katla fish through Jessore's Benapole land port have increased, with 230 metric tons of green chillies, 1,656 tons of tomatoes, and 1,026 tons of fish imported from August 1 to 8. However, overall trade through the port has decreased. 

The recent introduction of a 'crawling peg' system allows banks to sell dollars at up to 2.5% above the intermediate rate of Tk 117, setting a maximum rate of Tk 120 for import settlements. During a meeting at Bangladesh Bank, the governor clarified this policy and emphasized the timely settlement of all foreign payments.