Import rules eased for eight Ramadan commodities

Bangladesh Bank (BB) today eased the rules for banks regarding keeping a cash advance from the importers while opening letters of credit (LCs) to import essential commodities ahead of the fasting month of Ramadan when demand for certain items rises.

In order to increase supply and keep prices within tolerable level, the central bank asked banks to keep the advance payment, also known as the cash LC margin, at minimum level based on the bank-client relationship.

Banks should keep cash margin for opening of LCs from importers of edible oil, gram, pules, onion, sugar and dates, according to a circular by the BB.

The central bank asked banks to give priority to LCs for these essential commodities in order to ensure adequate supply in the market.

Banks will be able to keep minimum cash margin for LCs of the eight essential commodities until March 2024, according to the circular.

The is the second time the BB eased rules regarding LC margin for import which it imposed in July 2022 in its effort to discourage imports to prevent depletion of the foreign exchange reserves and contain the exchange rate.

In July 2022, the central bank asked banks to take 75 percent of the import value of the items, including essential commodities, as minimum margin.

Later in December 2022, it relaxed the rule ahead of the Ramadan.