Bangladesh has eased requirements on letters of credit (L/Cs) opened for rice imports.

The measure is meant to help stabilise the rice market, which has become very volatile over recent weeks, with severe shortages and some very dramatic price increases.

Rule change

Importers usually have to pay a fee to open L/Cs for rice imports.

But volatility in the rice market has prompted Bangladesh Bank to allow businesses to open L/Cs for rice imports with no fee and no collateral.

Additional directive

The central bank has also issued a directive allowing importers to buy rice without credit for a maximum of three months.

The rice shortage is due to harvests ruined by recent flooding in the rice producing Haor region and other natural disasters across the country.

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