Deferral support for industrial raw material import extended

Bangladesh Bank today extended the deferral support for another six months to settle the import orders of industrial raw materials, agricultural equipment and chemical fertilisers.

The central bank earlier extended the time by one year—which is scheduled to end in December this year—in order to settle the letters of credit under the supplier's and buyer's credit due to the business slowdown caused by the Covid-19 pandemic.

But the banking regulator has now set a new deadline, which will end in June, thanks to the dollar shortage in the banking sector, a Bangladesh Bank official said.

The reserves stood at $34.24 billion yesterday in contrast to around $45 billion a year ago.

The latest instruction given by the central bank will help banks get a relief from the ongoing stress in the foreign exchange market, the official said.

Under the supplier's credit, foreign suppliers extend credit for the relevant period and they receive payment at the end of tenure.

On the other hand, foreign lenders make payments to suppliers at sight basis under buyer's credit for which they receive payments at the end of maturity.

Businesses, however, will have to manage the relevant foreign entities to enjoy the deferral support, the official said.