Imports on rise as production increases

LC opening soars in July-Dec

Staff Correspondent

14 February, 2021 12:00 AM printer

Industrial production and domestic consumption increased in the first half of current fiscal year, causing a rise in the volume of Letter of Credits (LCs) opened for consumer goods and industrial raw material imports.

The latest data from Bangladesh Bank (BB) show that both the opening of LCs for consumer goods and industrial raw materials have increased by 4.58 per cent and 1.77 per cent respectively during the July-December period of the current fiscal year.

Research Director of the Centre for Policy Dialogue (CPD) Khandaker Golam Moazzem the upward trend in LC openings indicates a rise in domestic consumption.

More LCs for industrial raw materials imports mean that industrial production will go up, he added.

Trade expert and senior researcher of PRI Dr Abdur Razzaq said globally industrial production saw slightly positive growth in recent months after a severe fall due to the adverse impact of coronavirus pandemic.

Meanwhile, the settlement of LCs for consumer goods has increased by 12.40 per cent and the same for industrial raw materials LCs have declined 3.33 per cent year-on-year in December of FY 21.

On the other hand LC opening for importing capital machinery, intermediate goods and petroleum have declined by 11.34 per cent, 4.02 per cent and 23.23 per cent while the settlement of LCs in this category decreased by 37.58 per cent, 16.22 per cent and 12.99 per cent respectively.

LC opening for other miscellaneous goods saw a growth of 4.51 per cent. However, the settlement of LCs declined by 11.02 per cent.

The overall LCs opening amount stood at $28729.54 million and settlement $25027.33 million in the first half of FY21 which saw a slight fall of 0.80 per cent. The amount of LCs opening and settlement was $28960.24 million and $27596.82 million in the same period of FY20.

According to the BB data, LCs were opened for consumer goods worth around $3249.85 million, capital machinery $2394.01 million, intermediate goods $2471.57 million, petroleum $1697.88 million, industrial raw materials $10330.84 million and other miscellaneous goods $8585.39 million in July-December period of FY21.

LCs were settled for consumer goods worth around $3039.72 million, capital machinery $1654.92 million, intermediate goods $ 2101.62 million, petroleum $1744.55 million, industrial raw materials $8959.77 million and other miscellaneous goods $7526.75 million in July-December period of FY21.

On the other hand in the same period of FY20, LCs were opened for consumer goods worth around      

$3107.55 million, capital machinery $2700.19 million, intermediate goods $2574.98 million, petroleum $ 2211.63 million, industrial raw materials $ 10151.28 million and other miscellaneous goods $8214.61 million.

The LCs were settled in the same period of FY20 for consumer goods worth around $2704.28 million, capital machinery $2651.38 million, intermediate goods $2508.56 million, petroleum $ 2005.06 million, industrial raw materials $ 9268.32 million and other miscellaneous goods $8459.22 million.

 


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