DCCI for adequate dollar support for banks to pay for imports
The Dhaka Chamber of Commerce & Industry (DCCI) has urged the Bangladesh Bank to support commercial banks with adequate foreign exchange supply to help them settle letters of credits (LCs) with a view to keeping the market of essentials stable during Ramadan.
DCCI President Md Sameer Sattar made the call when the board of directors of the chamber called on Bangladesh Bank Governor Abdur Rouf Talukder at the central bank office on Monday, according to a press release of the chamber.
Bangladesh is facing a serious dollar shortage as escalated imports have driven down the foreign currency reserves. So, businesses can't go ahead with required imports to feed the economy owing to banks' inability to supply the American greenback needed.
The central bank has restricted non-essential imports to save US dollars. Amid the tightening of purchases from external sources, overall LC opening in Bangladesh slumped 14 per cent year-on-year in July-December. Settlement declined 9 per cent.
Sattar also stated that public-private partnership is crucial to tackling any economic challenge.
During the discussion, Sattar thanked the BB for unveiling a timely monetary policy statement (MPS) that would help both private and financial sectors turn around as the MPS includes some instrumental policies and guidance.
He also hailed the initiative of continuing the re-financing scheme of Tk 50,000 crore for agriculture, cottage, micro, small and medium enterprises (CMSMEs) and import-substitute industries.
Sattar emphasised necessary reforms like easing the documentary requirements for CMSMEs to access finance and, especially, in relation to the credit guarantee scheme for the better interest of the CMSME community.
Besides, he recommended easing the documentation process for young and innovative startups so that they can avail loans easily.
The DCCI chief underscored the need for enhancement of the private sector credit growth to accelerate its contribution in the economic resurgence.
He suggested ensuring good governance to contain the soaring non-performing loans by taking stern measures and fast-tracking loan recovery by focusing on habitual defaulters and bringing in necessary reforms to regulations in the banking sector.
In the press release, Abdur Rouf Talukder said: "We are facing three major challenges now."
The challenges are the ongoing Russia-Ukraine war, the interest rate hike by the Federal Reserve and the recent Covid surge in China.
"Despite these challenges, our economy is quite stable," he said.
The governor also indicated that the current situation of LCs may ease within the next couple of months.
The central bank is relentlessly working through relevant policy measures and actions like lowering the LC margin to ensure seamless supply of essential commodities in the market during the upcoming Ramadan, said Talukder.
Considering the importance of remittance inflow, he mentioned that recently there have been some changes in the process of sending remittance, including the waiver of relaxation of required documents and fees by local banks and engaging mobile financial services to bring money sent home by migrant workers.
As a result, the remittance inflow will increase considerably in future, said Talukder in the press release.
DCCI Senior Vice President SM Golam Faruk Alamgir Arman, Vice President Md Junaed Ibna Ali and members of the board were also present during the meeting.