Austerity measures have resulted in import orders dropping close to 24% or $1.77 billion in August following regulatory measures.
The opening of letters of credit (LCs), generally known as import orders, came down to $5.65 billion in August from $7.42 billion in the same month of the previous calendar year, according to the central bank's latest statistics.
It was $6.22 billion in July 2022.
Import orders stood at $213 million during the first four days of September 2022 against $1.2 billion in the same period of August this calendar year. It was $842 million in July.
On the other hand, settlement of LC, generally known as actual import, in terms of value, fell by nearly 13% to $6.47 billion in August from $7.42 billion a month before, according to the officials.
They also said such imports are still maintaining an upward trend compared with the previous year because of clearing outstanding import payments.
Such actual imports grew by more than 13% to $6.47 billion in August from $5.72 billion a year ago, the Bangladesh Bank (BB) data showed.
However, total outstanding import payments stood at $34.84 billion in FY22, against $26.67 billion in FY21.
Meanwhile, Bangladesh's export earnings grew 25.31% to $8.59 billion during the July-August period of FY23 from $6.86 billion, year on year, while the flow of inward remittances rose more than 12% to $4.13 billion from $3.68 billion.
As a whole, declining trend in imports, increases in export earning and inward remittance are good indicators to the potential turnaround of the economy, said Shah Md. Ahsan Habib, professor at the Bangladesh Institute of Bank Management (BIBM.)
He also saw the falling trend in imports involving unnecessary and luxurious items as a very good trend for the economy-in time of a global crisis.
The import orders are on a slope recently following different regulatory measures taken by both the government as well as the central bank.
Earlier on July 14, the central bank started monitoring LCs worth $5 million and above initially, using its dashboard, to discourage 'unnecessary' imports.
Currently, in a further belt-tightening, the BB monitors the LCs worth $3 million and above on the same grounds.
Earlier on July 25, the bankers were asked at a bankers' meeting to comply with all the ten regulatory measures announced by the central bank aiming to improve the foreign-currency-liquidity situation on the money market.
Among the regulatory measures are encashing 50% of total foreign currency held in relevant export-retention quota (ERQ) accounts, and slashing 5.0 percentage points of the net open position (NOP) limit of commercial banks.
