Industry Desk: Regulations imposed for LC in the aftermath of the dollar crisis have significantly shrunk imports causing the economy to slow down prompting industry leaders to urge the government to ease the restrictions.
The opening of letters of credit (LCs) for imports fell by more than 23% in the eight months to February as Bangladesh tightened its belt to release pressure on its foreign-exchange reserves.
This hurt many local manufacturers because imports of raw materials, capital machines and intermediate products have also decreased. Many involved in international trade believe that the drop in imports has slowed the economy as a whole. The total amount of LCs opened during the review period was $45.5 billion, a decrease of 23.53% from the same period the previous year.
LCs against intermediate goods fell by 30.32% during the eight months, capital machinery fell by 54.11%, industrial raw materials fell by 30.05%, consumer goods fell by 14.53%, machinery for various industries fell by 43.18% and others fell by 17%.
However, the primary export-earning sector of apparel-both oven and knit garments-remains unaffected because they import using back-to-back LCs. Back-to-back LCs account for over 13% of the LC openings.
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