The value of fresh import letters of credit (L/Cs) opened in Bangladesh significantly increased ahead of the Muslim holy month of Ramadan according to officials in Dhaka.

They say that the value of L/Cs increased during July and August - the first two months of the current fiscal year - and was up around 20 per cent compared with the corresponding period in the previous fiscal year.

Growing demand

In the last two months officials say the opening of import L/Cs for some essential items including rice, wheat, sugar, milk food, edible oils, pulses and onion rose to meet the growing demand of the essentials in the local markets.

Import L/Cs worth US$2.943 billion were opened during July and August 2007 compared with US$2.446 billion in the corresponding period of last year.

Further increases

Officials expect more increases. "Opening and settlement of L/Cs against imports will increase further to meet the growing demand for essential items for Ramadan," a senior Bangladesh Bank official told local media.

Banks writing L/C business as well as importers have been told by officials to keep prices reasonable during Ramadan, a time when financial institutions as well as traders have in the past been known to spike prices because of high levels of consumer demand during the holy month.

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