In January 2025, Bangladesh saw a 5.4% YoY decline in import LC openings, totaling $6.13 billion, due to lower demand and overdue LC payments. Weaker banks struggled to open new LCs, while state-owned banks prioritized clearing past dues. However, in July-January FY25, import LC openings rose 2.63% ($1 billion) YoY to $41 billion. Sector-wise, capital machinery LC openings dropped 34%, petroleum 9.73%, reflecting weak industrial expansion. Import LC settlements in January fell 1% YoY to $5.93 billion, but for July-January FY25, settlements increased to $40.25 billion from $39.43 billion YoY. Payments for capital machinery LCs fell 27% and intermediate goods 13%, indicating slowed production and investment. Banks managed dollar liquidity by scheduling payments, reducing deferred LC pressure. Private banks reported lower demand for essential Ramadan goods, reflecting cautious market sentiment. Experts warn that prolonged capital machinery import decline may hinder economic growth and job creation.
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