Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has asked Bangladesh Bank (BB) for back-to-back letter of credit (L/C) procedures to be amended to help textile firms cope with the adverse impact of the coronavirus outbreak on their businesses.

The L/C amendments are amongst several types of assistance requested in a letter to Bangladesh's central bank sent from BGMEA president Rubana Huq to BB governor Fazle Kabir.

L/C amendments

Huq has asked the BB governor to issue policy directives to commercial banks to amend clauses in back-to-back L/Cs to make payments to Chinese suppliers proportionate to the now much reduced value of imports from China.China is Bangladesh's largest trading partner, importing US$13.63 billion of Chinese goods in the 2018-19 fiscal year, of which of which US$5.02 billion was spent on textile raw materials and some 46 per cent of those raw materials normally come from China according to the BGMEA president.

Slowing imports

Imports from China have already slowed by 21 per cent in January and 37 per cent in the first week of February while no Chinese vessels are currently being seen at the normally busy Chattogram port.

Huq has also requested central bank assistance in the form of a disaster fund and a special credit guarantee scheme.

She hopes a special credit guarantee scheme will encourage commercial banks to continue supporting the industry.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.