Bangladesh has registered a significant fall in import costs by around 16 per cent during the fiscal year 2022-23, thanks to a series of stringent measures and tax hikes amid the prevailing dollar crisis.
The import costs rose by 36 per cent in the previous fiscal year. It triggered an acute dollar crisis, which eventually reverberated through the economy and pushed up inflation to nearly 10 per cent.
The financial adversities prompted the authorities to take different sorts of measures to control imports. It dragged down the import costs, but the question remains over the actual improvement in dollar-crisis.
The Bangladesh Bank has almost halved the forex reserve as it had to settle some government and private sector import liabilities. On Thursday, the banking sector regulator offloaded USD 67 million, bringing the reserve down to USD 23.23 billion. But the actual reserve is even lower.
The central bank apparently failed to comply with the minimum reserve ceiling set by the International Monetary Fund (IMF) as a loan condition.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank (MTB), noted a slight improvement in the dollar crisis, but said the crisis still persists.
“We still cannot open letters of credit (LCs) as per the clients’ demand. The foreign trade cannot be done as easily as before. Foreign banks do not grant loans or limits for more than 6 months,” he said, adding they are trying to handle the crisis with export and remittance income.
Sarwar Hossain, spokesperson of Bangladesh Bank, said there is no shortage of products in the country despite the decrease in imports. There is no scope to launder money abroad through this channel as all the LCs are now being verified thoroughly. The supply of dollars to the banks as well as inter-bank transactions has risen, which indicates an eased up situation.