The central bank has tightened spending on the foreign exchange reserve to judiciously meet the cost of importing essential commodities and fuel.
As part of this move, Bangladesh Bank has imposed restrictions on loans for importing 27 types of goods, reducing import demand which has increased by 44 per cent in recent months.
Read:BB asks banks to keep branches open in Dhaka cattle market areas on July 8,9
From now on, importers will not get bank loans for importing these products. Banks will not be allowed to use forex if the loan LCs was approved earlier.
The central bank directive stated that long-term negative effects of the corona and the recent prolongation of the war of Russia-Ukraine leads to instability in the global economy. To further consolidate the country's currency and debt management, the BB has directed to re-determine the cash margin rate in the case of opening of import bonds.
The directive stated that motorcars (sedans, SUVs, MPVs, etc.), electrical and electronics home appliances, gold and gold ornaments, precious metals and pearls, readymade garments, leather goods, jute goods, cosmetics, furniture and ornaments, fruits and flowers, - Certificate in respect of opening of securities for import of cereals (such as non-food items, processed foods and beverages, such as canned food, chocolate, biscuits, juices, soft drinks, etc.), alcoholic beverages, tobacco, tobacco products and other luxury goods, banks will have to maintain 100 per cent cash margin provision opening import LCs for these goods.
The required margin has to be deposited from the importers’ own source against the opening of import LCs for these products. No margin can be paid in favor of the importer in the concerned bank against the opening of the import loan by opening an existing loan account or by creating a new loan account.
In addition to baby food, essential food products, energy, life-saving medicines and equipment recognized by the Directorate of Health, medical equipment, directly imported capital equipment and raw materials for manufacturing local industries and export oriented industries, agricultural products and other government priority projects, minimum of 75 per cent cash margin should be maintained in case of opening import credit for all products.
Read: BB re-fixes mobile financial service money transaction limit
Dr Salehuddin Ahmed, former governor of BB told UNB that the central government has taken the right decision in discouraging such imports.
“The global economy is going into a volatile situation due to the prolonged Russia-Ukraine war and it is uncertain when the situation would improve,” he said.
So the crunch of forex spending is now important to avert any financial crisis, Salehuddin said.