Rising global prices for fuel and various other commodities are driving up import costs.
During the first four months of the current FY27 (July–October), letters of credit (LCs) opened for merchandise imports totaled $29.78 billion—a 25% increase compared to the same period of the previous fiscal year.
Over the same timeframe, LC settlements grew by 11.38%.
As a result, demand for the US dollar in the foreign exchange market is rising, pushing exchange rates upward.
According to Bangladesh Bank data, LC settlements during the first four months of the current FY27 reached $24.86 billion, while export earnings stood at $17.04 billion.
This resulted in a merchandise trade deficit of $7.82 billion.
During the first three months, this deficit stood at $7.47 billion.
Meanwhile, expatriate workers remitted $1.146 billion during the same period, representing a 12.97% increase compared to the corresponding period of the previous fiscal year.
Data shows that LCs worth $7.32 billion were opened in October, compared to $8.52 billion in the previous month of September.
LC settlements in October amounted to $5.95 billion, down from $6.45 billion in September.
Settlement amounts in July and August stood at $6.28 billion and $6.19 billion, respectively.
Bankers note that although remittances and export earnings are growing, strong demand for US dollars across various sectors—particularly for settling import liabilities—is driving up the exchange rate.
On Thursday, the US dollar traded at a maximum of Tk124.75 in the interbank market, with an average rate of Tk124.65, compared to an average of Tk 124.42 the previous day.
At the beginning of October, the dollar rate was Tk123. It then climbed steadily, reaching Tk123.99 by the final working day of the month.
Meanwhile, to ease pressure on the foreign exchange market, Bangladesh Bank recently sold $222 million to several commercial banks, which also caused foreign currency reserves to decline.
Gross reserves had surpassed $37 billion by the end of June 29, and rose to $37.85 billion in the first week of July.
Reserves on Thursday dropped to $34.99 billion. According to the IMF's BPM6 international accounting standard, reserves currently stand at $30.13 billion.
Comprehensive import data from Bangladesh Bank is not yet available. However, figures for the first three months indicate a substantial increase in fuel import expenses.
During this period, expenditure on petroleum product imports reached $4.22 billion—a 105% increase compared to the same period of the previous fiscal year.
Consumer goods import costs rose by 26.50% to $1.40 billion.
Conversely, imports of capital machinery decreased by 13.60%.
To maintain a stable supply of essential food items and keep prices under control ahead of the upcoming Ramadan, Bangladesh Bank has allowed importers to open usance (deferred payment) LCs with terms of up to 90 days for 10 types of commodities.
Under this facility, importers can pay for the goods within the stipulated period after receiving them.
The list of special items includes rice, wheat or flour, onions, lentils, edible oil, sugar, chana (gram), peas, spices, and dates.
These commodities can be imported under suppliers' credit or buyers' credit.
Previously, the central bank had instructed that LC margins for importing these commodities be kept at a minimum level.
