The opening of new letters of credit (L/Cs) against imports into Bangladesh increased by 20.4 per cent during the first five months of the current fiscal year compared with the same period last year, according to provisional statistics released by Bangladesh Bank (BB), the country's central bank.

Import L/Cs worth US$ 8.742 billion were opened between July and November this year as against US$7.261 billion in the corresponding period last year. The fiscal year in Bangladesh runs from 1 July to 30 June.

Demand driven

A central bank official told local media that the increase in import L/Cs was due to high demand for essential items including onions, edible oils and pulses.

He also reckoned that the increase in L/C business reflected sound economic performance.

Cyclone impact

Another central bank official said he expects the increase in L/Cs "will continue in the coming months as more imports of food grains, industrial raw materials and other commodities will be required to rehabilitate cyclone-hit people".

Cyclone Sidr struck Bangladesh on 15 November, killing approximately 3,500 people and leaving hundreds of thousands homeless.

Encouragement

Earlier this year, the central bank instructed commercial banks to promote import business by making it easier, particularly for small- and medium-sized businesses, to open fresh L/Cs against imports.

The central bank also asked commercial banks to be flexible while opening new L/Cs for the import of essential commodities.

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