In November 2023, settlements of import Letters of Credit (LCs) rose by 5% to $5.48 billion, while LC openings decreased by 6% to $5.09 billion, influenced by deferred payment pressures. Although remittance inflows and export growth were positive, the decline in LC openings can be linked to banks managing high future payment liabilities.
The increase in LC settlements is attributed to payments related to imports from previous months, with deferred LCs maturing. There’s a noticeable shift toward Sight LCs among businesses due to uncertainties in dollar availability and continuous devaluation of the local currency. Analysts suggest that reduced LC openings may impact investment, employment, and production as companies face challenges in importing an adequate quantity of raw materials, potentially leading to layoffs.
Source for more details:
