The opening and settlement of import letters of credit (LC) in June fell slightly from the previous month, as the financial industry was closed for several days owing to the Eid holidays.
According to central bank data, Bangladesh’s state-owned and commercial banks opened import LCs totaling US $ 5.17 billion in June, down from US $ 6.83 billion in May. However, LC openings in June climbed by roughly 6 per cent over the same period the previous year.
In FY ’24, a total of US $ 68.19 billion in import LCs were opened, representing a 1.85 per cent rise from US $ 66.95 billion in FY ’23.
When asked about the decrease in LC openings in June, numerous policymakers from state-owned and private banks mentioned the Eid vacations as the key cause.
However, despite decrease, the dollar inflow was strong. On average, monthly remittances for the current fiscal year have been below US $ 2 billion. But, in June, the banking sector received US $ 2.54 billion in remittances, the highest in 47 months.
Increased manpower exports and a rise in the dollar rate resulted in a 10.66% increase in remittance revenues for FY ’24 over the previous year. Remittances have increased since May, when the crawling peg exchange rate was introduced.
For the past year and a half, the central bank has taken numerous initiatives to cut import expenses, including requiring a 100 per cent margin for opening import LCs and discouraging luxury goods imports. While these actions have improved the balance of payments, trade, and current account balances, the financial account deficit has widened due to increased public and private debt repayments and trade credit.
According to central bank data, banks made import LC payments worth US $ 5.2 billion in June, slightly less than in May. However, LC settlements in June increased by 10 per cent compared to the same period last year.
A senior central bank official reportedly stated that the pressure on postponed LC payments has decreased as banks have curtailed the opening of deferred LCs to prevent currency rate risk. As a result, payments have decreased, he added.
In FY ’24, US $ 66 billion in import LCs were paid, down from US $ 72.91 billion in FY ’23, representing a 9.47 per cent decline from the same period last year.
A managing director of a private bank stated that banks are now selling dollars for LC settlements at rates ranging from Taka 118.60 to Taka 118.90. Furthermore, they are collecting remittance dollars at a maximum rate of Taka 118.50, he explained.
Bharat Tex Special Report 2026 
