Import LC Openings Drop 5.4% to $6.13B in Jan FY25

Bangladesh’s fresh fruit imports fell to $128.51 million in the first half of FY25, the lowest in three years, due to the taka’s depreciation and high import duties. Letters of credit (LC) openings for fruit imports declined 3.29% year-on-year to $140.5 million in July-December FY25.

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.

Bangladesh's imports grew 3.53% YoY to $32 billion in H1 FY25, rebounding from a 20% decline the previous year, driven by higher exports and remittances. December 2024 saw a 30% YoY surge in imports, supported by increased industrial raw material demand for export-oriented industries.

Over the past 16 years, Bangladesh’s trade relations with Pakistan were strained under the Awami League government, but a shift is occurring following a change in government. Trade with Pakistan has increased, while trade with India has slightly decreased.

Despite significant domestic production, imports of medicines, pharmaceutical products, and intermediate goods in Bangladesh have surged due to rising health issues and critical diseases. In the first four months of the current fiscal year, imports increased by 30.1% to $146.7 million.

The rising remittance dollar rate has pushed the exchange rate for import LC settlements to Tk123.80-125, raising concerns about higher import costs and inflation. Banks are buying remittance dollars at Tk124.80-125.60, a sharp increase in recent days due to surging demand.