The payment of import bills increased slightly in April after eight months of decline due to a rise in payment of import bills for food products and accessories for garments industries.
According to Bangladesh Bank data, in this financial year the payment of import bills increased year-on-year in July after which it registered a negative growth in every month due to the contractionary monetary policy taken by the central bank and poor business environment.
The BB data released on Tuesday showed that the settlement of LCs registered 2.30 per cent growth in April compared with that of 4.59 per cent growth in the corresponding month of 2012.
BB officials told New Age that the increase in import bill payment in last month was a temporary phenomenon as businessmen were still struggling to expand their investment amid the ongoing political turmoil, shortage of gas and electricity and high rate of interest on banks’ lending.
The BB data showed that the total import bill payment stood at $2.74 billion in April this year. It was $2.68 billion in April 2012 and $2.56 billion in April 2011.
The import of rice increased to $2.46 million in April this year from $0.84 million in April last year, that of wheat to $58.48 million from $28.89 million and that of back-to-back LCs (fabrics, accessories for garment’s industries) to $529.31 million from $397.75 million.
The import of capital machinery also increased significantly in April as a large amount of industrial equipment for the pharmaceutical industries was imported in the period, a BB official told New Age.
The import of capital machinery increased to $158.28 million in last month from $137.99 million in April, 2012.
The BB official said that the central bank was worried over the declining trend in import payment for the last few months as the lower import had created an unstable situation in the money market.
The country’s commercial banks are now sitting on the US dollars due to a decreased import demand which is continuously devaluing the greenback against the local currency taka, he said.
There is no room for complacency for the BB for the higher import bill payment in April as businesspeople are now waiting for a solution to the current political violence and the payment may decline in the coming months, he said.
‘But, the businesspeople think a political solution to the crisis may not be possible before the upcoming national elections. In this situation, they have adopted a “wait and see” approach in expanding their investment,’ he said.
The BB data showed that the LC opening or import orders increased by 19.28 per cent in April this year compared with that of 10.30 per cent in the same period a year ago.
In April 2013, LCs worth $3.32 billion were opened by the banks compared with LCs worth $2.78 billion opened in April 2012. LCs worth $2.52 billion were opened in April 2011.
-With New Age input
