In the last fiscal year, Bangladesh witnessed a trade deficit of $33.25 billion. However, effective import control measures implemented during the fiscal year 2022-23 resulted in a significant deficit reduction of $17.155 billion.
According to data released by the Central Bank, imports saw a decline of 15.76%, amounting to $69.49 billion. In comparison, exports experienced a growth of 6.28%, reaching $52.34 billion, thus contributing to the reduction in the trade deficit.
During the final month of the previous fiscal year, import LCs (Letter of Credit) decreased notably.
As reported by banking experts, the scarcity of dollars and the imposition of a ban on LCs for imports played a crucial role in this decline.
Compared June to the same month in the fiscal year 2021-22, import LCs worth $4.75 billion were opened, marking a staggering 44% decrease year-on-year.
The figures for May and April were also noteworthy, with import LCs worth $5.84 billion and $4.85 billion, respectively.
Throughout the fiscal year 2021-22, a total of $94.27 billion worth of import LCs were opened, but this amount dropped to $69.36 billion in the fiscal year 2022-23, indicating a substantial reduction of nearly $25 billion or 27% year-on-year in import LCs.
Banking experts point out that traders now face significant challenges in opening LCs for importing goods, primarily due to the various restrictions imposed by the Central Bank.
The imposition of a 100% margin requirement on some items has also discouraged their import.
Though a senior official from the Central Bank spoke anonymously, they emphasized that the reduction in currency transactions resulted from heightened surveillance and a decline in arbitrage through over-invoicing. Consequently, the overall quantity of LCs has decreased.
The official also asserted that, compared to the fiscal year 2021-22, the quantity of imported goods during 2022-23 has remained relatively high.