To facilitate the import of essential goods for the upcoming Ramadan, the central bank has taken steps to provide special benefits. From now on, importers can negotiate with banks to lower the margin for opening letters of credit (LC) to a minimum level for 11 types of goods.

On Wednesday (November 6), Bangladesh Bank issued a circular regarding this.

The circular states that the demand for certain essential goods typically rises during Ramadan. With this in mind, the central bank has implemented this measure to facilitate imports, helping keep prices at a tolerable level.

It was also mentioned that importers will be able to avail of this benefit until March 31 of next year.

The directive further states that, considering the increase in demand for essential items during Ramadan, the import of items like rice, wheat, onions, lentils, edible oil, sugar, eggs, chickpeas, peas, spices, and dates should be facilitated. To keep prices manageable and ensure adequate supply, banks are instructed to maintain the LC cash margin at a minimum level based on the bank-client relationship.

Previously, a 100% cash margin or deposit was required for product imports, but now this margin will be determined based on the relationship between the client and the bank.

Industry stakeholders believe that this relaxation of LC margins will encourage importers, requiring them to tie up less cash and reducing import costs. As a result, it may help lower the prices of these goods in the market.