BB eases LC rules for Ramadan essentials

Bangladesh Bank (BB) today relaxed rules regarding the import of essential food commodities to ensure adequate supplies in the domestic market during the holy month of Ramadan scheduled to begin at the end of February next year.

The central bank asked banks to open letters of credit (LCs) for import of items such as rice, wheat, onion, pulse, edible oil, sugar, egg, chickpea, spices and dates based on their relationship with clients.

It suggested banks keep minimum margins or advance on the import value from importers of Ramadan items, according to a circular.

The BB also directed banks to prioritise the settlement of LCs of food commodities.

However, the central bank retained the provision requiring importers to make full payment of the LC value for several items such as cars, electrical and home appliances, and fruits.

The central bank began to tighten LC opening rules in 2022 to curb imports and prevent the foreign exchange reserves see a drastic fall.

Bangladesh's gross foreign exchange reserves, which shot up to $48 billion, the highest on record, in August 2021, stood at $25.44 billion at the end of last month, according to the BB.